Preamble

The House met at half past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — ENERGY

Hinkley Point C

Mr. Fearn: To ask the Secretary of State for Energy what information he has on the basis upon which the Central Electricity Generating Board extended the expected life span of the proposed pressurised water reactor at Hinkley Point C by five years; and if he will make a statement.

The Parliamentary Under-Secretary of State for Energy (Mr. Michael Spicer): Subject to meeting the necessary safety requirements, plant lives are commercial matters for the generators concerned.

Mr. Fearn: Does the Minister agree that extending the life of Hinkley Point by five years and reducing the price of electricity by 15 per cent. is strange? Does he also agree that, in doing so, the CEGB is moving the goal posts once again because of the pressure that is now being brought to bear on nuclear power?

Mr. Spicer: No, I do not agree that it is strange. An initial assumption must be made about the economic life, for planning purposes. There is no reason why that should not be revised in the light of changed commercial considerations, as long as the plant meets all the safety conditions laid down by the Nuclear Installations Inspectorate.

Mr. Ian Bruce: Does my hon. Friend agree that the history of Magnox stations, whose lives have been usefully extended even though the Nuclear Installations Inspectorate has increased safety standards time and again, is indicative of the life that one can get from nuclear power and of the good economic argument for continuing nuclear power in this country?

Mr. Spicer: My hon. Friend is absolutely right. The economic life of Magnox stations has been increased from 20 to 25 and then to 30 years. That was done with increased safety standards. The Government's main concern is to ensure that commercial judgment is allowed to the operator, but, above all, that the plants are safe.

Electricity Industry (Privatisation)

Mr. Hardy: To ask the Secretary of State for Energy when he will next meet the chairman of the Central Electricity Generating Board to discuss the privatisation of the electricity supply industry.

The Secretary of State for Energy (Mr. Cecil Parkinson): I meet the chairman of the CEGB regularly to discuss various matters relating to the privatisation of the electricity supply industry.

Mr. Hardy: Will the Secretary of State discuss pricing with Lord Marshall, and, when he does, correct the misleading impression that he created in the House when he suggested that Labour Members want electricity to be sold off as cheaply as possible? Will he also discuss with him the steps that will be necessary to prevent South African mining interests from having a substantial interest in, and influence over, the private electricity generating industry?

Mr. Parkinson: There is no evidence that South African mining interests wish to have a major investment in the electricity supply industry. In fact, those reports were pure fiction. We shall certainly announce to the House measures that will ensure that no one person or groups of people acting in concert can obtain a major interest in our electricity supply industry.

Sir Trevor Skeet: Does my right hon. Friend agree that if the grid is owned by 12 instead of one there is greater opportunity for muddle in the event of a crisis or of surplus capacity having to be determined?

Mr. Parkinson: No, I do not. Although the grid will be owned by 12 individual shareholders, it will be operated by one strong management, which will have day-to-day control of it. In those circumstances, the ownership is irrelevant.

Mr. Matthew Taylor: Will the obligation on the CEGB to use the cheapest possible source of supply be maintained when it is privatised?

Mr. Parkinson: As the hon. Gentleman knows, we have made it clear that we believe that security of supply of electricity is all-important and that that security is best based on diversity. Therefore, we intend to legislate for a non-fossil fuel obligation, which will include nuclear, wave-power and wind. We believe that that is necessary for reasons which I have explained to the House and which one of these days the hon. Gentleman might understand.

Mr. Charles Wardle: If privatisation creates two separate generating companies which compete with each other in England and Wales, will that not exert a downward pressure on costs, to the advantage of the consumer?

Mr. Parkinson: I believe that it will, but it is only the beginning. We intend to strengthen the interconnecter with Scotland. We believe that Scotland can be an important supplier of electricty to the English market. We know for a fact that the area boards are already discussing with a variety of would-be generators the provision of additional capacity, so many generators will be operating in the market in the years ahead, and that must be good news for the customer.

Mr. Prescott: Is the Secretary of State aware that Inspector Barnes' inquiry into Hinkley Point C has made it clear that he is prepared to accept evidence to compare a coal-fired station with a nuclear-powered station, which is contrary to his own terms of reference? Will the Secretary of State make it clear to the chairman of the CEGB that his decision not to co-operate in the provision of such information is because he is of the view that the Government's 20 per cent. non-fossil fuel requirement means that it must be a nuclear power station?

Mr. Parkinson: I am glad to have the opportunity of clearing up this matter. The inspector must take whatever evidence he finds necessary for him to arrive at a recommendation that he will make to me. There is no restriction at all. The guidelines are not a restriction: they are guidelines. If the inspector feels that he needs further information, he must get it, and he has our encouragement in seeking it.

Mr. Harris: Will my right hon. Friend give the assurance for which I asked him in writing, namely,that the new privatised electricity companies will have parity of charges within their areas, so that, for example, there will be no disadvantage to consumers on the Isles of Scilly in my constituency or, indeed, consumers who live in rural as opposed to urban areas within that company's supply system?

Mr. Parkinson: We are extremely conscious of the anxiety that is felt in areas such as the Scilly Isles and the south-west. We recognise that it is a serious problem. We are sure that, when we make our proposals, my hon. Friend will be happy with them.

Mr. Dalyell: To ask the Secretary of State for Energy, pursuant to his answer of 9 May, Official Report, column 3, what information he has as to how many distributor-controlled systems of the type now proposed for the privatisation of elecricity in the United Kingdom have been set up on the advice of his Department's technical advisers, Merz and McLennan, in the other countries in which they have helped to install grid systems; and if he will make a statement.

Mr. Michael Spicer: Merz and McLennan have worked in many countries on grid systems with a wide variety of ownerships and structures.

Mr. Dalyell: I should like to thank the Minister publicly for giving up an hour and a quarter of his time to see my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), the hon. Member for Bedfordshire, North (Sir T. Skeet) and myself on the control of the grid. However, have Merz and McLennan ever anywhere in the world put forward a technological experiment as they have in Britain? Is this not an experiment?

Mr. Spicer: I thank the hon. Gentleman for the first part of his question, but the implication behind the rest of it is that we in this country are different. He is right, because Britain is virtually unique today in distinguishing between distribution and generation. Our proposals merely develop that in the interests of the consumer. The hon. Gentleman may be interested to know that many systems and companies in the United States are now pressing hard to be allowed to go the same way as we are going here, which shows that to be unique is not necessarily to be wrong.

Mr. Dykes: One of the weaknesses of the greater competition and lower prices argument for the distributors might be that they retain a powerful geographical monopoly in their areas. Does my hon. Friend agree that one of the ways in which that might be reduced or mitigated is to make sure that the retail operations in the showrooms and so on have full transparency and genuine competition both among themselves on different areas and with the private sector?

Mr. Spicer: It will be the Government's intention to ensure that there is transparency of the accounts of the distribution companies' retail outlets.

Coal-fired Power Stations (Scotland)

Mr. Eadie: To ask the Secretary of State for Energy what recent discussions he has now had with British Coal regarding coalburn in power stations in Scotland.

Mr. Parkinson: I have regular meetings with the chairman of British Coal to discuss all aspects of the coal industry.

Mr. Eadie: The Secretary of State must be aware that this is the three-month deadline for the South of Scotland Electricity Board and British Coal to reach an agreement on coalburn in power stations and that no agreement has been reached. Does that not show that the armchair speculating policy of his Department during the dispute has failed? Can he confirm the report in The Scotsman today that the dispute may have to be resolved in the courts? He must be aware that thousands of jobs in Scotland are at stake. Is it not time that we knew what the hell was going on?

Mr. Parkinson: I am sure that the hon. Gentleman will be pleased, as I am, to hear that agreement has been reached about tonnages and prices, and that only one or two secondary issues remain to be settled. They will be settled quickly, provided that both sides show good will and common sense. The uncertainty will be removed shortly and the news will be good.

Mr. Oppenheim: Will my right hon. Friend remind Opposition Members that Scotland has energy consumers, as well as energy producers, who rely on low-cost energy to ensure not only competitiveness but jobs?

Mr. Parkinson: There is a good future for the Scottish coal industry, provided that the men work the modern machinery in a modern way. There are good signs that Scottish miners—I congratulate them on this—wish to co-operate and work together with management to ensure that they can be competitive. They deserve all our support in doing that.

Mrs. Margaret Ewing: Will the Secretary of State be more forthcoming and tell us exactly when he expects the dispute to be resolved, because it is vital to the continuing success of the Scottish coal industry?

Mr. Parkinson: I cannot say much more than I already have, but I assure the hon. Lady that I keep in day-to-day touch with this matter and did not make my remarks lightly. The main matter outstanding is secondary, and I have reason to believe that it will be resolved shortly. As soon as it is, I shall ensure that it is reported.

Mr. Bill Walker: Does my right hon. Friend agree that it is in the interests of Ravenscraig in particular—one of the major consumers of electricity in Scotland—that Scottish energy prices should he competitive? Is it not equally important to recognise that much of the coal mined in Scotland is opencast and that there is every reason why the Scots should be able to compete cost-effectively? When that is achieved, there there will be no reason why anyone should fear for jobs in Scotland.

Mr. Parkinson: The most important part of what I have said is that agreement has been reached about tonnages and prices. That means that the SSEB, as the customer, is satisfied that it can buy large quantities of coal at keen prices. That is good news.

Bradwell

Mr. Alan W. Williams: To ask the Secretary of State for Energy what information he has received from the Nuclear Installations Inspectorate and the Central Electricity Generating Board as to the expected restart date of Bradwell No. 1 reactor and as to this station's expected lifetime.

Mr. Michael Spicer: I am advised that the Central Electricity Generating Board and the Nuclear Installations Inspectorate are in close consultation about the modification and further studies which would be required for continued operation of the station to 1992.

Mr. Williams: As the Nuclear Installations Inspectorate has expressed serious concern about possible cracks in the pressure vessel and the integrity of wells in the coolant gas circuits, is it not dangerous to continue operating this 26-year-old reactor? is it not irresponsible of the Government to be thinking of selling clapped-out reactors? The position is rather like that in the Persian Gulf yesterday, in that there is an accident waiting to happen. The Government should be announcing the closure of these old Magnox reactors before privatisation, rather than risking another Chernobyl.

Mr. Spicer: The Government have complete confidence in the Nuclear Installations Inspectorate, which has full responsibility for ensuring that Magnox stations are safe. There will be no question of their either continuing in operation or being passed as fit and safe unless the NII is convinced that they are.

Mr. John Garrett: Is it not clear that the cost of safety measures required by the Nuclear Installations Inspectorate will mean that Bradwell, Berkeley and possibly other Magnox stations will be closed in the next few years? How do the Government propose to dispose of them to private ownership? Who will carry the cost of decommissioning? Or will the Government just bury them in concrete at public expense?

Mr. Spicer: Whether the Magnox stations continue—if they are passed as fit to continue by the NII—will depend on the commercial judgment of the operating companies. They will no doubt take into account, as they normally do, provision for decommissioning. The inheritor companies, when they are sold to the private sector, will also have to make adequate provision for decommissioning.

Mr. Ian Bruce: First, let me declare an interest. My brother works at Bradwell power station.
We understand that the NII would never allow a nuclear power station to continue if it was unsafe, but we may be going down the path of constantly increasing safety standards well beyond any sensible level. Can my hon. Friend assure me that there is some control over what the inspectorate is likely to require in any of the power stations, and also that it has the resources to make proper checks, rather than simply saying, "We have not the resources to make the checks. so we will say no."?

Mr. Spicer: The Government are determined that the British nuclear industry will be as safe in the future as It has been in the past. The resources available to the NII have been increased considerably. There are now 120 inspectors, and the inspectorate is advertising for more. How long the stations will be kept open is a matter for the commercial judgment of the operators, and it is for the inspectorate to ensure that they are safe.

CEGB (Investment)

Mr. Cousins: To ask the Secretary of State for Energy what information he has as to the level of investment, in real terms, by the Central Electricity Generating Board in (a) the years 1975 to 1980 and (b)1987–88; and what discussions he has had with the chairman of the board concerning the case for increased investment.

Mr. Parkinson: Annual capital expenditure by the CEGB between 1975 and 1980 was in the range of £1,000 million to £1,300 million in today's prices, compared with £556 million in 1987–88.

Mr. Cousins: Does the Secretary of State accept that those figures confirm the investment slump in new power generation capacity, that, despite his promises, it is not being corrected, that it is being added to by fears about privatisation, that the CEGB is putting its contracts on a design-first basis without commitment to production, and that, without a firm home base of new orders, the British power generation industry could disappear after 1992?

Mr. Parkinson: Those figures show that in the 1960s and 1970s there was a chronic over-estimate of the need for capacity and that far too many power stations were built. The net result is that the taxpayer—the customer—has been funding that huge over-capacity for a long time. We are now coming to the end of it, and between now and the year 2000 a figure approaching £40,000 million will need to be invested, not only in generating capacity but in modernising the grid. Our plans are firmly based on that.
Last year's expenditure was low because there was only one power station under construction—Sizewell. I hope that when we come forward with our plans the hon. Gentleman will support them, thus ensuring a regular flow of orders for manufacturing industry.

Mr. Marlow: Arising out of the latest very worrying evidence about the damage to the ozone layer and the fact that coal-fired power stations are environmentally much more damaging and dangerous than the nuclear alternative, will my right hon. Friend tell the House what action he proposes to ensure that the bulk of that investment goes towards nuclear generation, which of course is much safer?

Mr. Parkinson: My hon. Friend is correct. Many of the people who complain bitterly about the damage to the ozone layer and environmental pollution strenuously oppose the cleanest, safest source of electricity, which is atomic. We are making arrangements to clean up the emissions from coal-fired stations. That is a very expensive proposition, but it will be done.

Mr. Barron: When the Secretary of State discusses future investment with the chairman of the CEGB, as implied by the question put by my hon. Friend the Menber for Newcastle upon Tyne, Central (Mr. Cousins), which the right hon. Gentleman has not yet answered, what does he intend to do about the CEGB's withdrawal from the fluidised bed combustion project in the south Yorkshire coalfield, which would have provided clean coalburn for the future? Will the Secretary of State tell the CEGB that investment must go ahead to keep that project going, so that we can have clean coalburn without the effects of radioactivity which nuclear power may involve?

Mr. Parkinson: That is just one of the technologies which produce less damaging emissions. The CEGB has decided that it is not prepared, for its purposes, to fund that technology any further. [HON. MEMBERS: "Why not?"] That must be a decision for the CEGB. I do not operate the power stations. The CEGB operates them and is in a better position than me to take decisions on this matter. The CEGB has made its decision and I do not intend to overrule it.

Electricity Industry (Privatisation)

Mr. Colvin: To ask the Secretary of State for Energy what is the Government's latest timetable for, the privatisation of the electricity industry.

Mr. Parkinson: I intend to introduce legislation at the earliest opportunity.

Mr. Colvin: My right hon. Friend will be aware of the mounting opposition to the CEGB's proposals for Fawley B power station and the ancillary coal-importing jetty. It will cost the ratepayers of Hampshire up to £1 million to fight the public inquiry that my right hon. Friend has authorised, when at the end of the day Big G, or whoever then owns Fawley, may not want the power station. Would it not make far more sense to postpone any plans for the public inquiry until after the electricity industry is privatised?

Mr. Parkinson: As my hon. Friend knows, I am in a quasi-judicial position, inasmuch as I shall have to take the decision after the public inquiry has taken place and the inspector has made his recommendation, so I cannot say anything in the House either for or against Fawley. All I can say is that my hon. Friend the Member for Romsey and Waterside (Mr. Colvin) has found innumerable ingenious ways to make his views on the subject well known, as have many of his constituents.

Mr. Nicholas Brown: Is the Secretary of State aware that in communities such as the one that I represent there is concern about the adverse effect of privatisation on the procurement programme for coal-fired power stations? The Secretary of State has announced the first order in the

CEGB's declared order programme. Can he say anything about the timing of the remaining coal-fired power station orders?

Mr. Parkinson: One of the features in the future will be that the supply industry will no longer depend only on the CEGB and the CEGB's views about when it intends to order its coal-fired power stations. A number of private generators are already planning to burn coal and are discussing the building of generating capacity.. I believe that as the new situation is understood there will be more orders for coal-fired power stations more quickly, rather than fewer more slowly.

Mr. Gow: When my right hon. Friend is considering the very important subject of privatisation of the electricity industry, will he apply his formidable mind to the timetable for the privatisation of the coal industry?

Mr. Parkinson: I have made it clear that we have ambitions to privatise the coal industry, but we shall not be doing that in this Parliament. There is no reason at all why coal should remain a state-owned monopoly.

Mr. Prescott: In view of the right hon. Gentleman's failure to answer the question about Lord Marshall's commitment to a nuclear power station at Hinkley Point, may I ask whether he has read the National Consumer Council report, published last week, about his privatisation plans? It concludes that the plans
give little scope for competition and that the consumer is ripe for exploitation with forced exploitation of the moe expensive nuclear energy.
Is that not further evidence that privatisation, while good for the right hon. Gentleman's promotion, is a lousy deal for the consumer, and will he reconsider his position?

Mr. Parkinson: As the hon. Gentleman has complimented me on my non-promotion, may I compliment him on being Mr. Scargill's nominee for the deputy leadership of the Labour party. I made clear my position on Hinkley Point C. The inspector is entitled to take whatever evidence he feels is necessary to arrive at his conclusion, and he will seek that evidence.

Mr. Prescott: Answer the question.

Mr. Speaker: Order. Let us all calm down.

Paper Manufacturing (Energy Costs)

Mr. Sumberg: To ask the Secretary of State for Energy by what percentage energy costs for the paper manufacturing industry have risen over the past five years; and what has been the comparable increase in energy costs for manufacturing industry as a whole.

The Minister of State, Department of Energy (Mr. Peter Morrison): In the past five years energy costs per unit of output have fallen by almost 40 per cent. in real terms both in the paper manufacturing industry and across manufacturing as a whole.

Mr. Sumberg: My right hon. Friend will be aware of the importance of the paper industry to Radcliffe in my constituency. Will he bear in mind the need for the industry to have cheaper energy supplies, because it faces fierce competition from abroad? Will my right hon. Friend


do all that he can to ensure that the industry is aware of that need, so that it can compete successfully and provide much-needed jobs for all my constituents?

Mr. Morrison: I am aware of my hon. Friend's interest, not only in paper manufacturing, but in his constituency. As I said in my original response, relatively speaking, costs have decreased. That must be good for the industry.

Mr. Barron: Last year, on the BBC television programme "Taming the Dragon", the chairman of the CEGB said that nuclear energy was more expensive than energy from coal and that it was a matter of jam tomorrow. In view of that comment and the costs of the nuclear industry, does the right hon. Gentleman not think that it would be far better to secure electricity prices for all industries and that the CEGB should sign contracts with British Coal so that British Coal supplies our energy producers?

Mr. Morrison: I am interested in what the hon. Gentleman has to say. I suspect that some of his hon. Friends on the Labour Back Benches would not agree with him in terms of the contracts that they hope will be placed in their constituencies. Yet again, there seems to be a division in the Labour party.

Mr. Teddy Taylor: Does levying VAT on energy help to contain costs? Has my right hon. Friend had any representations from industry and commerce, especially from insurance and small firms that will not be able to pay those costs? Is there nothing that Parliament can do about the instruction from the European Court to levy VAT?

Mr. Morrison: My hon. Friend is anticipating question No. 14, which he has tabled. I have had no representations, but I keep closely in touch with the gas and electricity industries.

Air Pollution

Mr. Simon Hughes: To ask the Secretary of State for Energy if he has made any response to the first report of the Environment Select Committee, HC270–1 regarding air pollution; and if he will make a statement on his policy towards the sections relating to the electricity supply industry.

Mr. Parkinson: The Government received this report in the middle of last month and are considering it very carefully. A response will be made as soon as possible. However, the House will already be aware that the Government have recently agreed—subject to parliamentary reserve—to the European Communities' directive on the control of emissions from large combustion plant.

Mr. Hughes: Does the Secretary of State accept the Committee's recommendations that one of the most important matters is energy conservation, especially in the context of sulphur emissions? In the light of the Government's recent decision to reduce the funding of the Energy Efficiency Office—from £24 million to £15 million—and last week's call from the Toronto climatological conference, which recommended a global cut in our energy consumption by one fifth in 17 years, can the right hon. Gentleman give an undertaking that the issue will be treated with the seriousness that it deserves? Does he agree that strong action needs to be taken by the Government before it is too late?

Mr. Parkinson: We accept the need to clean up the environment, and particularly to stop continued pollution. That is why we accepted a programme that will involve substantial expenditure on fitting FGD and other equipment to reduce SO2 emissions substantially—by 60 per cent. by the year 2003. Since 1970, we have reduced those emissions by 40 per cent. There is a big drive to achieve the result that the hon. Gentleman wants. As to energy efficiency, we recognise that there is still a huge waste, put at about £7 billion a year, of energy paid for and not properly used, and we are carefully targeting our work on that sector. We accept, as the hon. Gentleman does, the importance of the subject.

Mr. Rost: If, in due course, the scientists agree that the world's nations have to act to reduce the emissions of carbon dioxide to prevent the global catastrophe of the greenhouse effect, do we not already have proven technology, adopted by many countries in Europe, to burn half the amount of fossil fuel to produce the same amount of useful energy, by using the heat from our electricity production instead of throwing it away?

Mr. Parkinson: I know of my hon. Friend's enthusiasm for CHP, and I support him. I was in Leicester on Thursday, discussing the CHP proposals there. There are more efficient ways to generate electricity and heat, of which CHP is an important one.

Mr. Eadie: As the question asks about the politicies e f the electrcity supply industry, will the right hon. Gentleman answer the question posed by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott), arising out of the National Consumer Council's report, which, I repeat, warns that the Government's proposals to force local distribution companies to buy a minimum percentage of electricity from non-fossil fuel generating stations—in practice, from nuclear power stations—will make electricity more expensive for the consumer? Will the right hon. Gentleman answer that question?

Mr. Parkinson: That has nothing to do with the original question. If the hon. Member for Midlothian (Mr. Eadie) wants an answer, let me point out that the National Consumer Council's principal criticism of our proposals was that we did not break up the generating industry sufficiently and we did not therefore—[Interruption.] I am answering the question, which the hon. Gentleman did not understand. I am saying how the National Consumer Council criticised us. It said that we need more competition, not less, so there is no consolation for the hon. Gentleman in that. Secondly, I have explained to the House——

Mr. Frank Cook: The right hon. Gentleman does not know the answer, so he he is changing the question.

Mr. Parkinson: If the hon. Member for Stockton, North (Mr. Cook) would maintain the Whips' tradition and shut up, we would get on more quickly. We believe that diversity of supply is a vital part of security of supply. We have put these proposals to the House, and the House has approved them. Very often the hon. Member for Midlothian gives the impression that he does not understand his questions, let alone the answers.

Mr. Heathcoat-Amory: I return my right hon. Friend to the greenhouse effect. Is his Department conducting studies into the build-up of carbon dioxide in the


atmosphere, which may well be leading to a general heating-up of the world's atmosphere, with consequential changes to the weather pattern, and possibly a rise in the sea level? As carbon dioxide is chiefly produced by the burning of fossil fuels, does this have implications for the way in which we generate our electrity in the future, and could my right hon. Friend conduct a study into the specific problem?

Mr. Parkinson: We are conducting studies into the cost of electricity from fossil fuels. It has become clear that huge costs arise from the production and burning of coal, costs which Labour Members consistently ignore when they argue the case against nuclear energy. The sooner they open their eyes and recognise those costs, the better.

Alternative Energy Sources

Mr. Knox: To ask the Secretary of State for Energy what assessment he has made of the level of spending in the United Kingdom on research into alternative sources of energy in the current financial year.

Mr. Michael Spicer: About £16 million has been allocated from my Department's research and development budget in the current financial year for alternative sources of energy. An estimated £4 million from external sources is also expected. In addition, it is estimated that between £10 million and £15 million will be spent by private industry on its own research and development programmes.

Mr. Knox: What plans do the Government have for the future development of renewable energy sources? Can my hon. Friend say which are the front runners?

Mr. Spicer: The energy paper I announced in the House on 20 June gives our strategy for the future of renewable energy. In that paper we say that fuel from waste and energy from wind and tidal sources are the most promising. Each of those could provide up to 3 per cent. of our total energy requirement by the year 2025.

Coal Industry (Scotland)

Mr. Strang: To ask the Secretary of State for Energy what has been the level of investment by British Coal in Scotland's mining industry in each of the last five years for which figures are available.

Mr. Parkinson: A total of £129 million over the five years 1982–83 to 1986–87. I shall arrange for the individual figures to be circulated in the Official Report.

Mr. Strang: Can the Secretary of State confirm reports that his right hon. and learned Friend the Secretary of State for Scotland is to meet the chairman of British Coal later this week? Is he aware of the great concern in Scotland that his right hon. and learned Friend is prepared to write off that investment, damage our balance of payments and destroy thousands of jobs, which are dependent on the Scottish coal industry, as part of the price he believes has to be paid for the privatisation of the SSEB? Will the right hon. Gentleman make it clear to his right hon. and learned Friend that it will contravene the spirit, if not the letter, of Lord Prosser's judgment in the Court of Session if British Coal is required to burn imported coal at Cockenzie and Longannet?

Mr. Parkinson: I answered the heart of the hon. Gentleman's point in an earlier reply. There are good reasons to believe that the SSEB and British Coal are on the point of reaching an agreement about tonnage and prices, and that is the best evidence that the fear that the hon. Gentleman is implying exists is ill-founded. It is true that my right hon. and learned Friend will talk to the chairman of British Coal. He and I have an identical position in that we both wish to see agreement reached between the two industries.

Following are the figures:

Investment by British Coal in Scotland's mining industry over the period 1982–83 to 1986–87


Year
Level of investment



£million


1982–83
34


1983–84
32


1984–85
25


1985–86
23


1986–87
15


Total
129

Oral Answers to Questions — THE ARTS

Soviet Union (Ministerial Visit)

Mr. Knapman: To ask the Minister for the Arts what cultural activities he attended during his recent visit to the Soviet Union; and if he will make a statement.

Mr. Kirkhope: To ask the Minister for the Arts if he will make a statement on his recent visit to the Soviet Union.

The Minister for the Arts (Mr. Richard Luce): I paid the first official visit by a British Minister for the Arts to the Soviet Union on 6–12 June. I was warmly welcomed and had the opportunity for a wide-ranging exchange of views with the Soviet Minister of Culture, Mr. Zakharov. I was also able to visit a variety of museums and cultural events in Moscow, Tbilisi and Leningrad.

Mr. Knapman: I thank my right hon. Friend for his reply and for his initiative, because cultural exchanges between the Soviet Union and the United Kingdom are a good way of reducing tension. However, is my right hon. Friend confident that there is a satisfactory balance in exchanges between the Soviet Union and Britain?

Mr. Luce: I agree with my hon. Friend that cultural exchanges of one sort or another can do a great deal to improve understanding between countries. I am satisfied that the memorandum of understanding gives wide scope for exchanges between the two sides. On my hon. Friend's second point, it would be true to say that there are far more Soviet artistic events coming to Britain than is the case the other way. I should like to see that balance made more even in future. I am glad that Mr. Zakharov, the Minister of Culture, will come to Britain, and at that stage we shall review ways in which we can make things easier.

Mr. Kirkhope: I, too, am happy with my right hon. Friend's reply. However, does he agree that the recent well-publicised difficulties encountered by the English


National Theatre on its visit to the Soviet Union will put off many other English or British touring companies that might wish to go to that place?

Mr. Luce: My hon. Friend has put his finger on the problem. Many administrative difficulties are faced by English and British arts organisations when they go to the Soviet Union. I made it plain to Mr. Zakharov that until there is an improvement in the administration of the inflow of the visits it will be difficult to encourage more people to go. The National Theatre experience is just one example of that. I was struck by Mr. Zakharov's reaction to that and his desire to try to put it right in the best way possible.

Mr. Menzies Campbell: Does the Minister agree that one way of redressing the balance to which he has referred is to ensure an increase in the funding available to the British Council for its work in the Eastern bloc and for the establishment of a British Council office in Moscow, separate and distinct from the British embassy there?

Mr. Luce: I had a chance to visit the British Council's office in Moscow and was struck by the work that it does. My right hon. and learned Friend the Foreign and Commonwealth Secretary has responsibility for the British Council, but I agree with the hon. and learned Gentleman that the work that it does is outstandingly good.

Mr. Boyes: When the Minister was in the Soviet Union, did he mention his continuing and growing enthusiasm for photography and for people to have the opportunity to visit galleries free? Did he tell them about the brilliant Members' exhibition of photographs and our willingness to exchange photographs with Soviet parliamentarians?

Mr. Luce: I never cease to be amazed by the hon. Gentleman's ingenuity in bringing photography to the forefront of artistic activity and exchanges in the House. I admire very much the exhibition, which I have seen, and the artistic quality and ability of hon. Members.

Mr. Harry Greenway: Did my right hon. Friend investigate the funding of the arts in the Soviet Union? Am I right in thinking that while it has high subsidies for the arts, there are comparatively low wages, whereas the position here is the reverse? Which does my right hon. Friend prefer?

Mr. Luce: The interesting point that my hon. Friend would wish to know is that one of the Soviet Union's objectives in arts, commerce and industry under the new policies of perestroika is to make its arts activities self-financing and self-governing. I wish it every success in that effort. These changes are a matter of great interest to us all.

Mr. Tony Banks: With the Minister going to the Soviet Union, and my hon. Friend the Member for Stoke-on-Trent, Central (Mr. Fisher) going to China, I am beginning to suspect that there is a Communist plot. Will the Minister say whether we can expect some cultural perestroika in this country, given the damage that has been done to the arts by the Government's policies? Will he say whether his visit to the Soviet Union was coincidental with the fact that the noble Lord Gowrie is trying to earn some Moscow gold this Thursday by selling off Soviet pictures for Sothebys?

Mr. Luce: I congratulate the hon. Gentleman on his temporary assignment to the Front Bench. He is always

entertaining, whether it be from the Front or Back Benches. China and the Soviet Union are interested in what we are doing to fund the arts. The fact that we are undergoing structural changes, in which we are looking to the private sector to play an increasingly important role, was of great interest to the Chinese Minister of Culture when he came here two weeks ago.

British Library

Mr. Andrew Mitchell: To ask the Minister for the Arts how much Government funding has so far been given to the British Library project.

Mr. Luce: Total expenditure, excluding site purchase, is £59 million up to the end of May 1988.

Mr. Mitchell: I thank my right hon. Friend for that encouraging answer. Is he aware that this exciting new project is welcomed not only by scholars and academics but by the general public, who will be able to use the magnificent new facilities?

Mr. Luce: My hon. Friend is right. When the new British Library is open in the 1990s there will be vastly improved facilities for readers, improved storage facilities—at present books are stored in no fewer than 20 building; in and around London—and much improved conservation and environmental conditions, which are important to conserve books. In addition, there will be improved facilities, not only for scholars, but for the public as a whole, especially with the exhibition areas and the vast auditorium of 2,600 seats.

Mr. Buchan: How does the Minister square this welcome for developing library facilities with the horrendous Green Paper? Has he come to any conclusions about the Green Paper? The suggestions for privatisation, charging for research, new books and biographies run counter to the aims of the British Library and, I should have thought, his own.

Mr. Luce: The hon. Gentleman will know that the consultation period for the Green Paper on British public libraries was completed at the end of last week. I am therefore now embarking on a study of all the representations that have been made, the majority of which are extremely constructive and show an understanding of the objectives of the Green Paper, which are to help libraries improve services and enable them to get better value for money. That surely is in the public interest.

Mr. Bowis: Has my right hon. Friend been able to make an assessment of what the cost would be to the British Library and other libraries if VAT were to be imposed on books, resulting in additional costs to the taxpayer and ratepayer through further subsidies? If he has assessed the figure, will he draw it to the attention of my right hon. Friend the Chancellor of the Exchequer and Lord Cockfield?

Mr. Luce: I note what my hon. Friend says. I shall certainly draw that point to the attention of my right hon. Friend the Chancellor.

Library Services

Mr. Andrew Smith: To ask the Minister for the Arts whether he will visit Oxford to see the range of library services offered by the county council there.

Mr. Luce: I have no immediate plans to do so.

Mr. Smith: Although the Minister may have no immediate plans to visit Oxford, will he join me in congratulating the Oxfordshire library staff on the marvellous job that they do? What steps does he intend to take to ensure that there is more investment in library facilities? Will he assure us that the disastrous thoughts that the Government have had about charging for library services will not be proceeded with, and will he make a clear declaration to the House to reassure people that the abysmal record of library closures under his stewardship will not be continued?

Mr. Luce: Without any shadow of doubt, the Oxfordshire library service is of a very high standard. I am pleased that its submission to me on the Green Paper was very constructive. It showed an understanding of what the Green Paper was about, which is that there should be improved value for money and improved services. We are looking for ways to achieve that. The hon. Gentleman seems to misunderstand what already happens in libraries. Libraries already have discretion and authority to charge for certain types of service and £22 million is already raised in that way. Furthermore, services are being improved by a number of library authorities. The hon. Gentleman shows ignorance about that side of the service. I seek to bring the service up to date, bearing in mind the dramatic changes that have taken place in it over the past 10 or 15 years. That will lead to an improved service.

Mr. Haynes: To ask the Minister for the Arts When it is his intention to introduce legislation to implement the proposals in the Green Paper on financing public library services.

Mr. Luce: Some of the proposals in the Green Paper would require legislation, although others would not. For those that do, the first step will be to put an enabling power in place. The introduction of new powers by order will follow once the responses to the Green Paper have been fully assessed.

Mr. Haynes: Is the Minister aware that the Green Paper is a disgrace? Does he not realise that the library authorities up and down the country are doing a first-class job? All that the Government are trying to do is to pour money into the pockets of the people who buy in. Nottinghamshire county council has always done a first-class job.

Mr. Luce: The hon. Gentleman should not get quite so excited——

Mr. Haynes: I do get excited about things like this.

Mr. Luce: The hon. Gentleman does get rather excited from time to time, but he may like to know that the representations from a large range of local authorities have been extremely constructive and have shown a complete understanding of what the Green Paper is all about. The hon. Gentleman does not—[Interruption.] It would help if the hon. Gentleman would listen for a moment, but perhaps he does not want to hear. The hon. Gentleman

does not seem to realise that a clear reassurance has been given that the basic services will remain free. However, there are a number of services for which there is some charging already. That is one way of increasing revenue and improving specialist services. Is the hon. Gentleman interested in improving services, or not?

Oral Answers to Questions — CIVIL SERVICE

Secondments

Mr. Chapman: To ask the Minister for the Civil Service if he has any plans to expand the numbers of secondments from industry to the Civil Service and vice versa.

The Minister of State, Privy Council Office (Mr. Richard Luce): The Government are anxious to improve contacts between industry and the Civil Service, and a range of measures, including secondments, are being undertaken to achieve that.

Mr. Chapman: I welcome the fact that there has been an increase in secondments between industry and the Civil Service in recent years. However, does my right hon. Friend agree that the numbers are still small and that secondments ought to be encouraged further? I recognise the difficulties of full-time secondments, even for short periods. Will my right hon. Friend therefore consider encouraging part-time secondments—for example, by encouraging civil servants to take non-executive directorships in companies, provided that taking such a position in no way conflicts with their departmental interests and responsibilities?

Mr. Luce: I appreciate the continuing interest that my hon. Friend shows in the subject. It is important to have an even stronger interchange between the Civil Service and industry and commerce, and with other activities, too. My hon. Friend is right to focus attention on secondments, but also to consider other ways in which such an interchange can be achieved. The Government are reviewing all the arrangements that can be set up to achieve greater interchange between the Civil Service and the commercial sector, and we are considering a number of options, such as more flexible secondment, the Whitehall and industry scheme, non-executive directorships, better training, late entry schemes and so on. These must be considered as a package rather than as single measures.

Mr. Tony Banks: Is the right hon. Gentleman aware of the scandals about defence contracts currently developing in the United States? Does he think that there are dangers for Britain in having too close a link between contractors and business men who provide goods and services to the Government and civil servants? Is there not too much possibility of corruption? Surely the Minister should ensure that there are enough safeguards so that we do not go the same way as the United States.

Mr. Luce: I do not know whether I should commiserate with the hon. Gentleman, who, just a few seconds ago, was on the Front Bench, but has now gone to the Back Bench. He suggests that there is sometimes a conflict of interests between the duties of civil servants who take outside jobs and their duties as former civil servants. There is a clear procedure for this, which is supervised by the Diamond committee. The most important thing is to ensure that


there is no conflict of interests. I am satisfied that the procedures which are working now are satisfactory. Provided that there is no conflict of interests, it is healthy that civil servants should have experience of commerce and industry.

Mr. Key: Does my right hon. Friend agree that, political rhetoric apart, we should be aiming for closer partnership between industry and the Civil Service? Does he agree also that the Civil Service can provide enormous opportunities in, for example, the provision of apprenticeships in Boscombe Down, which is in my constituency, and that the commercial sector can develop a new relationship with the Civil Service, as at the public health laboratory service at Porton Down?

Mr. Luce: I am grateful to my hon. Friend. I know that he has a large number of civil servants in his constituency, many of' them specialists, and that quite a number of them have experience of such interchanges. The way in which my hon. Friend asks his question shows that there are many ways in which an interchange can be achieved. My hon. Friend has given a couple of examples.

CHIEF Computer System

Mr. Allen: To ask the Minister for the Civil Service if he will make a statement regarding the CHIEF computer system as it affects his ministerial responsibilities.

Mr. Luce: The CHIEF computer system does not affect my ministerial responsibilities.

Mr. Allen: As this computer system is to be used in the Civil Service, will the Minister support my referral to the Public Accounts Committee of the scandal of £4 million extra having to be paid for the contract to go out-house rather than in-house? Will the right hon. Gentleman use his great authority with the Chancellor of the Exchequer to get the business case for the CHIEF computer system published? Will he also support my giving this document to the press so that the public can know that the scandal exists?

Mr. Luce: It should be made plain that the so-called CHIEF computer system is to do with Customs' handling of import and export freight from 1992. It is not a matter for me, but one for my right hon. Friend the Chancellor of the Exchequer. The hon. Gentleman must direct his questions in that direction.

Mr. Teddy Taylor: Is my right hon. Friend aware from his recent and welcome visit to Southend that, in that part of the world, there is the greatest difficulty in operating any kind of computer system because of the problems of recruiting and retaining suitably qualified staff? Does he agree that, to be successful, as he knows it should be, the Civil Service must have conditions for specialists that are comparable with the private sector?

Mr. Luce: I enjoyed my visit to Southend and to my hon. Friend's constituency. I admire the work being done by civil servants there. My hon. Friend knows that a flexible pay scheme is now evolving. It allows us to take much more into account the recruitment, retention and motivation requirements in different parts of the country. It is in that direction that we must move if we are to take account of the problems that my lion. Friend mentioned.

Equal Opportunities

Mr. Janner: To ask the Minister for the Civil Service which Departments of the Civil Service have not completed ethnic monitoring exercises in accordance with the codes of the Commission for Racial Equality and the Equal Opportunities Commission.

Mr. Luce: Almost all Government Departments completed surveys of the ethnic origin of their staff by the end of June 1988. The remaining few hope to have completed the data collection in the next two months.

Mr. Janner: Has the Minister read the enormous array of replies from the various Civil Service Departments to questions that I raised regarding ethnic monitoring and the totally unsatisfactory results that they have shown'? Knowing of his personal commitment that people should be treated fairly, and that he wants people to be treated neither better nor worse because of their ethnic origin, and as he knows the extent of discrimination that remains within all areas of the Civil Service, will he please consult his fellow Ministers and inform the House what he proposes to do to achieve the fairness that we know he wants?

Mr. Luce: We are studying evidence from the monitoring exercise. One or two more Departments need to complete their monitoring within the next two months, after which we shall reach a view on how best to proceed. It is right to state clearly that the purpose of the exercise is to give us sufficient information to ensure, as best as we can, that there is genuine equality of opportunity. That is what we are aiming for; that is the objective of the exercise. The information will enable us to do our job properly.

Mr. Forth: Will my right hon. Friend assure the House that despite that rather offensive, patronising, wasteful and unnecessary exercise, recruitment and promotion in the Civil Service will continue to be purely on the basis of merit?

Mr. Luce: I readily give my hon. Friend that assurance. I must stress again that the purpose of the ethnic monitoring is to enable us to ensure that there is equality of opportunity. That is all we are aiming for, and that is the Government's policy in every area of our activity.

Dr. Marek: Will the Minister condemn what his hon. Friend the Member for Mid-Worcestershire (Mr. Forth) said about there being no purpose to ethnic monitoring?

Mr. Luce: My hon. Friend was right to say that recruitment and promotion in the Civil Service must he on the basis of merit. I pointed out that the evidence from ethnic monitoring would help us to ensure an effective policy on equality of opportunity. I understood my hon. Friend to agree that our policy should be one of equality of opportunity.

Security and Ethical Standards

Mr. Dalyell: To ask the Minister for the Civil Service whether, in the light of recent leaks of correspondence between, and internal briefings for, Ministers, he proposes to issue any further guidance to the Civil Service about security and ethical standards; and if he will make a statement.

Mr. Luce: No. The note on the duties and responsibilities of civil servants to Ministers, issued in December 1987 by the head of the home Civil Service, gives clear guidance to officials on their obligation to keep the confidences arising in the course of their work. It also sets out the procedures to be followed should officials find themselves in ethical dilemmas.

Mr. Dalyell: Can the House and the Civil Service be told whether the right hon. Member for Henley (Mr. Heseltine) was correct, or incorrect, to tell the pupils of St.

Edward's school, Oxford, the source of the letter intended to discredit him in the Westland affair, which was then published in the school magazine? The source was the Prime Minister. Was the right hon. Gentleman right, or wrong?

Mr. Luce: I have to admit that I do not have time to read every school magazine. If I did, I would not be doing my job properly. We have been over this ground with the hon. Gentleman time and again during the past two and a half years. Answers have been given and there is nothing further or useful that I can say, and certainly not about that school magazine.

Points of Order

Mr. Brian Wilson: On a point of order, Mr. Speaker. In view of the Prime Minister's extraordinary comments last night about the shooting down of the Iranian air liner, in advance of detailed evidence or inquiry, would it be in order to ask that the right hon. Lady makes a statement to the House on the implications of her words for Britain? Once again, in the court of international opinion, Britain is seen as an uncritical admirer of every American action——

Mr. Speaker: Order. Whether the Prime Minister makes a statement to the House is not a matter for me.

Mr. Tam Dalyell: On a point of order, Mr. Speaker. It may have been brought to your attention, as Mr. Deputy Speaker promised, that there was some question about the length of certain speeches during the foreign affairs debate on Thursday. It is fair to say that there was a feeling on both sides of the House that the fact that, in one of those rare debates, four Front-Bench speeches took 125 minutes should merit the consideration of the Chair and the Leader of the House. Have you had time to reflect on what happened? Many hon. Members were unable to speak in that debate.

Mr. Speaker: I have the greatest sympathy, because I know that many Back Benchers wanted to take part in that debate. I well remember, in days not very long ago, when very effective speeches were made from the Front Bench in less than 20 minutes. I think that it would be a good idea if we could return to those days. Speeches should certainly not last more than 30 minutes.
The Clerk will now proceed to read the Orders of the Day.

Mr. Allan Roberts: On a point of order, Mr. Speaker. Did you not receive my request, in writing, to move the Adjournment of the House, under Standing Order No. 20, which was submitted to your office this morning?

Mr. Speaker: I regret that I have not seen any request.

Mr. Roberts: It was certainly submitted to your office this morning.

Mr. Speaker: By the hon. Gentleman?

Mr. Roberts: Yes.

Mr. Speaker: I shall look into the matter, but I regret I cannot do anything about it now.

Orders of the Day — Civil Evidence (Scotland) Bill [Lords]

As amended (in the Standing Committee), considered.

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): I beg to move, That the Bill be now read the Third time.
In fairness to the House, I should mention that the hon. Member for Glasgow, Garscadden (Mr. Dewar) pointed out that I spoke for a substantial time on Second Reading. We also had full debate on four mornings in Committee. I shall speak more briefly today.
Hon. Members have given a general welcome to the Bill and I am glad that they have done so. As the hon. Member for Garscadden said on Second Reading, the Bill is
a significant law reform measure"—[Official Report, 16 May 1988; Vol. 133, c. 743.]
It implements, with certain changes, the Scottish Law Commission's report entitled "Corroboration, Hearsay and Related Matters in Civil Proceedings." I give the full title of the report as it makes clear that the Bill has no relevance to criminal proceedings.
A particular aim of the Bill is to ensure that a court should, generally speaking, have available to it all the relevant evidence from whatever source. The Bill seeks to achieve that by the two provisions which appear at the beginning of the Bill. The requirement for corroboration in civil proceedings is abolished in clause 1, while clause 2 provides that evidence is not to be excluded solely on the ground that it is hearsay. I am sure that the Bill will be regarded as a welcome simplification of the law. It will have the result that cases which previously would not have been heard in court will now be heard as a result of the admissibility of hearsay evidence and the removal of the often technical barrier of the requirement of corroboration.
My noble and learned Friend the Lord Advocate remarked in the other place that the Bill contains what some may regard as radical changes to the law of civil evidence. It seems, however, that we in Scotland have set a precedent for our colleagues south of the border. As hon. Members may have noticed, the recent report of the Lord Chancellor's review body on civil justice referred to the present Bill and concluded that it appeared that an inquiry was needed to consider whether the hearsay rule should be abolished in England and Wales also
On Second Reading the hon. Member for Paisley. South (Mr. Buchan) told us of his nostalgic memories of the Law Reform (Miscellaneous Provisions) (Scotland) Bill 1968. The subsequent 1968 Act led to the removal of the requirement for corroboration in actions for damages. for personal injuries. The hon. Gentleman recorded his pleasure in listening to the rustle of dead leaves. From the official records we have evidence of more than the rustle of dead leaves. The 1968 Act has burgeoned. The Bill under consideration achieves the abolition of the requirement of corroboration in civil proceedings.
We considered fully the Bill's provisions on Second Reading and in Committee. The wide-ranging debate has led us into some matters at the edges of the Bill's


provisions or even perhaps beyond them. However, the result has been a full consideration of the Bill's provisions and I am grateful to all hon. Members who have contributed to our debates. On Second Reading my hon. Friend the Member for Dumfries (Sir, H. Monro) congratulated the commission on bringing forward the report on which this Bill is based. He was right to do so. I am sure that the Bill will be regarded as a further important contribution to the reform of the law of Scotland

Mr. Donald Dewar: This will be a brief speech because, although we did not have a long Committee stage, it was an adequate one in which most of the points were given a reasonable airing. That in itself is interesting because only a few years ago this would have been a contentious Bill. The fact that it is no longer so shows our more pragmatic approach to the problems of law reform.
I had a little innocent entertainment on Second Reading and in Committee by referring to the debates on the Law Reform (Miscellaneous Provisions) (Scotland) Act 1968. I would never talk about the rustling of dead leaves, but on that occasion the Conservative Opposition spokesman—now Lord Wylie—expressed horror at that modest loosening of the requirements of corroboration, which he described as offensive. His reaction was entirely genuine and no one could accuse him of taking a reactionary view, but it shows how far we have moved. On this occasion, no one had a serious objection to the concept that hearsay and corroboration should be relaxed more generally—not just for some actions for personal damages, but across the scope of civil actions in Scotland.
As the House will remember, although the Scottish Law Commission, whose report was the basis of the Bill, paused and considered a different approach in consistorial actions, it came to the conclusion—rightly—that that distinction could not properly be maintained. Although at least one submission suggested that there was a risk of civil proofs being decided on one piece of uncorroborated hearsay evidence, few people doubted that, at least in broad terms, the Bill was a move in the right direction and that we should welcome it.
In Committee our arguments were limited. I expressed some doubts—he Minister worked long and hard to assure me that they were unfounded—about cases in which people were ambushed by hearsay evidence in the middle of a proof. One party's evidence may throw up a hearsay statement that is not likely to be the subject of further evidence from the person who is alleged to have made it, and I was anxious about the right to challenge and cross-examine, which is fundamental to the search for truth in the courts. The Minister relied heavily on clause 4, which he thought was sufficient to provide an unfettered right for the party at the wrong end of the hearsay evidence to produce a relevant witness to speak to that statement. I am reasonably satisfied with that
I make no complaint about it, because we have moved quickly with the Bill, but I note that in Committee the Minister said:
There is no question that, in principle, additional witnesses can be called right up to the commencement of closing submissions. Regarding the citation of witnesses, if a

party is taken by surprise by hearsay evidence, he could say that he wanted to call the witness involved. It is more likely that the witness is available, but not called. In those circumstances, the other party could make it clear to the court that the best available evidence had not been relied upon in that the witness involved had not been called.
The hon. Member for Garscadden asked what procedural steps would be taken. I shall make inquiries about what the relevant motion and form should be and I shall send him a letter about that."—[Official Report, First Scottish Standing Committee; 21 June 1988, c. 56.]
The letter has not yet reached me, and I am still not clear. There seemed to be a slight difference in the advice being offered by the Minister. First, he said that there was no problem because under the normal rules of procedure in clause 4 the party with an interest in rebutting or minimising the impact of the hearsay statement would have no difficulty producing the necessary witness or witnesses. But then he said that the party can make hay by commenting that it was hearsay, that the witness could have been produced and that the best evidence had not been put before the court. I recognise that the Minister has hardly had time to catch up with what has happened, so it may be a matter for further correspondence.
In Committee, amendment No. 6 was an attempt to deal with a case in which someone has gone back on a precognition in the box, but because a precognition is not included in the definition of a statement in the interpretation clause, in effect one cannot put to him the facts contained in the precognition. The Minister seems to be saying that the precognition clerk can always be called, but I am not sure how that would work, so perhaps he will say something about it.
I have no wish to delay the House with a highly technical matter, so I conclude with a few words about something that we touched on but did not discuss, largely because the Minister said that he wanted to think about it. It is a matter of some moment. In the interpretation clause, clause 9, there is a definition of civil proceedings, which deals with
any hearing by the sheriff under section 42 of the Social Work (Scotland) Act 1968.
The definition makes it clear that these are civil proceedings, so corroboration and hearsay would not apply, but it excludes a referral under section 32(2)(g) of the 1968 Act.
Those who follow these matters will know that this is a circumstance in which the ground for referral is based upon an alleged criminal offence. I tabled a probing amendment to include one other ground—section 32(2)(d), which refers to offences for which the grounds for referral are offences under schedule 1 of the Criminal Procedure (Scotland) Act 1978, which are a series of offences involving physical and sexual abuse of children. If that had been proceeded with, the relaxation of hearsay and corroboration rules would not apply in this case either. That narrow category would have been removed from the definition of civil proceedings.
I recognised that this was likely to be controversial; for unfortunate reasons, this whole subject is particularly sensitive at the moment, but that is genuinely coincidental. I tabled the amendment because I thought there was a case for debating the subject. I know that my hon. Friend the Member for Aberdeen, South (Mr. Doran) made a well informed and combative contribution on it in Committee in which, to put it in legal language, he made it clear that he would not have touched the amendment with a barge pole, and I can understand that. I am aware that there are


tremendous sensitivities about this issue. I know of a number of experiences from my constituency, and I am sure that my hon. Friends have heard of similar ones. There is no doubt that any allegation of sexual abuse of children must be taken with enormous seriousness by the authorities. There was unanimity in Committee about the fact that the interests of the child are and must be paramount in such circumstances.
I mention another aspect in passing. If such an allegation is made, and even if no formal proceedings in the courts or by a children's panel are taken, the stigma that results often continues for a considerable time. If there is a finding on the ground of referral after a section 42 proof, that stigma will be a serious matter for the entire family. It was to discuss this difficult area that I tabled the amendment. I accepted that it would be controversial, but I felt that it should be examined. It arose directly in the definition clause of the Bill.
As my hon. Friend the Member for Aberdeen, South and the Minister have said, this is a matter of some significance. The view of the Association of Reporters to Children's Panels is that in some cases a finding of a referral being established would succeed with the relaxation of the corroboration and hearsay evidence, but would not if the normal rules, as we have known them until this Bill, continued. Perhaps it is a small number of anxious cases, but the balance is important, and clearly it will be affected by the Bill.
The Minister truncated out debate—I make no complaint about that—by saying that he wanted to think about the amendment, consult and then come back to us. He has come back with astonishing speed, because we debated the matter only 10 days ago, towards the end of June. The Minister wrote to me on 30 June saying that he had no intention of changing the Bill as it stands, which will come as no surprise. However, as he has been courteous enough to write to me, and as I know that the matter has attracted some interest and is so sensitive, it would be no bad thing if, during this debate, his defence and the fact that he has decided to rely on the contents of the Bill and the definition of "civil proceedings" in clause 9 were recorded.
The Minister argues in his letter to me that a change would be "neither necessary nor desirable". I understand the force of what he says. I gather that he has had the opportunity to discuss the matter with the Association of Reporters to Children's Panels. He also relies on the original consultation, the Scottish Law Commission report, in which there was consideration of that point. Having spoken to the reporters, the Minister is satisfied that there is no need for change. I would not necessarily quarrel with that.
I notice that, in his letter, the Minister argues that if the change went through
relatively fewer of the cases under ground (d), as compared with cases under the other grounds (other than ground (g)) would be the subject of a referral.
In other words, the Minister's fear is that, if the amendment had been incorporated, reporters would recognise that if one was dealing with a schedule 1 offence or the allegation of a schedule 1 offence, one would not have been able to go to proof in the knowledge that corroboration and hearsay had been relaxed and that there might therefore be a tendency to look for other grounds of referral. I can see that, although I should be a little surprised if it was a major consideration.
It was worth discussing this matter. The Minister is saying that allegation of those offences will now be taken on the new standard of evidence, although at a later date criminal prosecutions might not or could not be mounted in the same set of circumstances. There is a gap and a difference of perception, which could lead to some difficulties.
However, I am content to let the matter rest. I accept that there is an obvious distinction between the offence grounds—that is, section 32(2)(g)—and all the other grounds under section 32 of the 1968 Act, which is that the standard of proof is different. In other words, under section 32(2)(g) one has to prove beyond reasonable doubt, while in all the other matters, including ground (d) based on schedule 1 offences, it is on the balance of probabilities. If one had been going to alter the present Bill to retain hearsay and corroboration in that wider group of offences when they constitute a ground of referral, almost inevitably one would have had to look at the standard of proof as well, or one would have had a strange stepped and staired situation. I accept that there is probably no case for doing that.
On balance, I must accept the advice from the professionals that the best way to maintain a flexible legal capacity to take powers to protect a child who is at risk is to leave the Bill as it stands. I am prepared to do so—indeed, I must, as the Bill is at the end of its road. In any event, I should not wish to pursue that point, although it was worth raising; it was important. It was right that the Committee should consider it, however briefly. It tempted the Minister to write in a considered way, after some thought, on the lines that I described to the House.

Mr. Menzies Campbell: The Bill enjoys all-party support which in no small measure is due to the rigorous analysis and presentation of the Scottish Law Commission, whose recommendations form the basis of the Bill. Some hon. Members may be aware that the present chairman of the Scottish Law Commission, Lord Maxwell, is shortly to retire. Those of us who have had any dealings with him or who are aware of the quality of the work under his chairmanship of the commission will wish to congratulate him on that work and to extend good wishes to his equally illustrious successor, Lord Davidson, who will take up his responsibilities at the beginning of October.
This Bill is a necessary and desirable reform of rules of evidence which were once seen as the bulwark of our civil law, but which are now seen as obstacles standing in the way of justice. I retain the same views as I expressed on Second Reading about the extent to which civil proceedings are defined in the Bill. I have a suspicion that they are insufficiently defined and that some controversy may yet arise in practice about whether the definition is apt to embrace all the circumstances which may arise.
I take this opportunity yet again to draw to the Minister's attention a point which I made previously. The effect of relaxing the rules of corroboration and hearsay means that a person may now sue for £10 million, for example, in the sheriff court without any corroboration, while before a tribunal of another kind concerned, for example, with whether a patient obtained faulty treatment from a dentist—that example has recently come within my knowledge in respect of a constituent—such a party


seeking to establish faulty treatment will still be met by the need for corroboration and by the exclusion of hearsay evidence.
When that matter was raised on Second Reading the Minister responded favourably to my request to consider it, and since then the Minister with responsibility for health in Scotland has made clear in correspondence a similar willingness to consider the point. I hope that the Minister will stress that these assurances are genuine and that the approach taken will reflect in degree the substantial alteration in the rules of evidence which we are about to enforce today.
I cannot conclude without reminding the Minister that the welcome given to the relaxation of the rules on corroboration and hearsay is expressly and advisedly confined to civil proceedings. The need for corroboration in criminal proceedings remains paramount. I invite the Minister in his reply to respond in a way which will alleviate any doubts that some of us may have that these proposals are the forerunner for similar proposals in criminal law. If the rule requiring corroboration and against hearsay were ever removed, either expressly or by implication, from the criminal procedure in Scotland, it would create a wholly unacceptable disturbance of the balance of that legal system, which is separate and distinct from the criminal law which pertains in England and Wales.
With those reservations, I welcome the Bill. I do not believe that there will be a Division on it. The Bill will bring necessary progress in an area of our law where existing rules have become obstacles. For those reasons, I commend the Bill to the House.

Mr. Andrew Welsh: In some ways this has been a very strange Bill. The lawyers to whom I spoke gave it a general welcome, although they always added "but" and never quite finished the sentence. There were some individual doubts and reservations, but none of great substance, and that is probably as much success as any legislation will ever receive. It is perhaps a compliment to the Scottish Law Commission, which has produced a report and recommendations that the Government could follow without too much major variation.
There are, however, some lingering doubts, especially on the question of the new rules of evidence applying to civil as opposed to criminal law. Although the changes in the Bill with regard to civil procedure are acceptable and welcome, hearsay evidence would not be welcomed if transferred to criminal procedure. Although the Minister has given some assurances, he still has not categorically denied that any such switch in procedure will be made. He should be well warned that there would be opposition on both sides of the House to any such move.
Another major problem—perhaps slightly outside the scope of the Bill—was reflected in relation to the difficulties involving the Scottish Legal Aid Board. The Bill has allowed the problem to be aired. I hope that the difficulties alluded to have been taken on board by the Government, and will be dealt with in detail when changes are made in the near future.
May I thank the hon. Member for Glasgow, Garscadden (Mr. Dewar) for the series of excellent legal

seminars with which he graced the Committee? No doubt legal students in Scotland were following his words. It is a rare joy to watch a politician who is happy in his work, and the hon. Gentleman was certainly happy in his Committee work.
I also thank the Minister for his customary courtesy in dealing with a Bill which I hope will bring to reality the promised reforms that it seeks to promote.

Mr. Alistair Darling: As has been said, the Bill is largely non-controversial and has been welcomed by hon. Members on both sides of the House.
I should like to raise three points. The first, which was mentioned in Committee, is the question of procedure before tribunals. As was said by the hon. and learned Member for Fife, North-East (Mr. Campbell), it would be quite wrong if a claim could be pursued through the Court of Session or the sheriff courts in Scotland without being bound by the rules of corroboration and with the admission of hearsay evidence. On the other hand, if someone appearing before a social security tribunal, for instance, did not have that advantage, his case could be seriously prejudiced.
The Minister will realise that the vast majority of those who appear before tribunals are not legally represented, and often have to fund the expense of appearing themselves. It would be grossly unfair to penalise them simply because the Bill as now drafted means that they might have to obtain corroboration, and might not be allowed hearsay evidence. The Minister said in Committee that he did not believe that that would be a problem, and that being bound by corroboration would be the exception rather than the rule. Nevertheless, I would like to press him on the point. A great deal of hardship may be caused, along with natural and justfiable resentment on the part of those who are often least able to protect themselves. I should not be surprised, given the Government's present attitude towards social security claimants in general, if they sought to use a sledgehammer to have a go at those who might dare to claim against the social security fund.
My second point is worth emphasising, because we live in times in which many things previously thought impossible have become possible under the present Government. I should like the Minister to reiterate that there is no question of corroboration being relaxed in criminal proceedings. He gave a sort of undertaking at the beginning of the Committee stage, and we were all surprised to find when we read the proceedings that they were headed not Civil Evidence (Scotland) Bill but Criminal Evidence (Scotland) Bill. We were naturally concerned in view of the Minister's fervent denials only 48 hours before. It is important that the Minister states categorically on behalf of the Government that there will be no question of corroboration being dispensed with in criminal cases. It is a cardinal rule on both sides of the border, and should never be thrown away.
On the first day of the Committee proceedings, I mentioned no-fault liability and the Minister undertook to look into it. I was not able to take part in the second half of the Committee's deliberations, for reasons of which I think that the Minister is aware. I read in the proceedings, however, that he had said that the Lord Chancellor was considering a scheme of no-fault liability in regard to motor accidents.
I am not sure how much of an extension that is of the existing knock-for-knock scheme operated by insurance


companies, but I welcome the fact that at long last the door has been opened. While such a scheme is not without difficulties, it would relieve considerable suffering and hardship if it could be established to allow someone to receive compensation, and then allow an organisation funded by the state to act against the wrongdoer. Years of hardship and uncertainty could be relieved, and I am glad that, although the Minister has not opened the door as wide as I should like, he has at least opened it a little. In years to come, we may look back on these proceedings as a time when the Government showed themselves willing to consider the possibility.
The Bill goes a long way towards alleviating some of the difficulties that have been experienced in Scotland, but such schemes as no-fault liability ought to be considered. This is the first opportunity that I have had to thank the Minister for considering the matter in Committee. I look forward particularly, however, to his undertakings on tribunals.

Mr. Frank Doran: I apologise to the Minister, who clearly thought that his ordeal was over!
I want to concentrate on one simple point: the effect of the Bill on the children's hearings system. Given the comments made by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), it is important to consider the position in Scotland. Later this week, the House will consider the results of the Cleveland inquiry. Many of the faults that that report will throw up were considered a long time ago in Scotland, and, although the children's hearings system there is not perfect, I think that on examination it will be shown to be dealing very satisfactorily with all the problems referred to in the Cleveland report.
For example, we have the unique post of the reporter of the children's panel, who is independent of the courts, the police and the social services. That system operates far more speedily than the English system, and there is a right of appeal from the earliest stages. The courts are statutorily obliged to hear appeals as quickly as possible, and the "place of safety" procedures allow the parents to become involved very early. I hope that those who speak for the Government will he present when we discuss the Cleveland report so that the benefits of the Scottish system can be made plain to them.

Dr. Norman A. Godman: I have listened carefully to what my hon. Friend has said about the children's hearings system. There is also the important concept of the role of the safeguarder, who is concerned directly with the interests of the child. That concept ought to be developed further in the Scottish system.

Mr. Doran: I agree entirely. In fact, I was one of the first safeguarders appointed in the Tayside region, and I operated for a couple of years in that capacity, so I have some experience. My hon. Friend is right to point out that where there is a conflict between the interests of the parent and those of the child we have that special officer, who is appointed by either the court or the children's hearings system.
We debated on Second Reading and in Committee how much easier it would be for the reporter to obtain evidence and establish grounds—particularly those of child sexual

abuse—as a result of the inclusion of the grounds under the Social Work (Scotland) Act 1968 and the application of this Bill. Let me say how grateful I am for this opportunity, as are all those who have been involved with the child care system in Scotland, for this opportunity. In Committee, I gave a graphic example of how this could operate in practice. Any measure which adds to our ability to protect extremely vulnerable children while safeguarding the rights of the parents must be applauded. I am therefore grateful that the Minister has not sought to bring back the amendment to which my hon. Friend the Member for Garscadden referred and that the way has been opened for more successful prosecution of offenders and protection of children who are abused.

Lord James Douglas-Hamilton: I thank hon. Members for their general welcome for the Bill. I congratulate the hon. Member for Edinburgh. Central (Mr. Darling) on becoming a father, which was why he could not be present when I made my statement on no-fault liability.
Strong views have been expressed in the House about the need for corroboration in criminal law. Those views will be imparted to the Scottish Law Commission, which is carrying out a study of the subject, and I am sure that they will be taken into account. I do not wish to say anything that would limit the remit of that study.
With regard to tribunal proceedings, the final paragraph of the notes on clauses in relation to clause 9 states:
In its application to arbitrations, tribunals, inquiries and other proceedings conducted under a procedure agreed between the parties an exception is made for proceedings in relation to which specific provision has been made as regards the rules of evidence which are to apply.
But generally the relaxation brought about by the Bill would apply.
I thank the hon. Member for Angus, East (Mr. Welsh) for his general welcome for the Bill. I answered his points on the last day of the Committee when he was not present.
The hon. and learned Member for Fife, North-East (Mr. Campbell) raised a number of other points. I can only say that they will be taken into account in the Scottish Law Commission report.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) raised a couple of very serious matters. He said, first, that we should have a search for the truth and, secondly, that allegations which lead to a stigma should be very carefully considered. The hon. Gentleman's comments on the first point are covered by clause 4. The Committee agreed that a precognition may not report precisely the words of the person precognosced. As such, that would be an unreliable basis on which to attack credibility. The hon. Member for Garscadden asked how credibility could be attacked in those circumstances. Clause 4 provides that, with the leave of the court, the person may be called or recalled as a witness at any time before the presentation of evidence is concluded. The fact that a person has previously been in court is no bar to such calling or recalling. Therefore, if it is desired to challenge a witness's credibility by reference to what that person is reported in the precognition as having said, it can be done by calling as a witness the precognoscer—that is, the person who interviewed the witness and wrote the precognition.
I promised to write to the hon. Member for Garscadden about the procedural points, but I have made inquiries and can give him a reply now. There are no court procedural rules about this. As I said, it is a matter for the discretion of the judge. If the hon. Gentleman wishes to pursue the matter further in correspondence, he can do so. Strictly speaking, responsibility for making rules both for the Court of Session and for the sheriff court is that of the Court of Session. The rules are made by the Court of Session as recommended by the Court of Session and sheriff court rules councils, which are independent bodies.
We are bound to take very seriously the extremely important issue of child abuse, especially as the numbers of cases have been increasing. The hon. Member for Garscadden stressed his concern about the stigma that might be placed on other members of the family when a child is referred following a children's hearing but without there being adequate evidence for criminal prosecution of another member of the family. As the law stands, there are already different standards of proof for children's hearings and criminal proceedings. With one exception, all the grounds for referral of a child as in need of compulsory measures of care are on a "balance of probabilities" rather than "beyond reasonable doubt". The exception relates to the case of an offence by a child, where the test of "beyond reasonable doubt" would apply. In all other cases, the test would be that of the "balance of probabilities". That distinction is not introduced by the Bill—it has existed for almost 20 years. Under the 1968 Act, the standard of proof remains the "balance of probabilities" and in criminal proceedings it remains "beyond reasonable doubt". The Bill will make it easier for a child to be referred as referral will be possible on hearsay or uncorroborated evidence. That is clearly in the best interests of the child. If a reporter has been over-zealous in referring a child to a children's hearing, application can be made to the sheriff for the evidence to be considered afresh.

Dr. Godman: With regard to the prosecution of child abuse cases, will not a wide gap open up between the English and Scottish procedures? Clause 31 of the English Criminal Justice Bill introduces closed-circuit television recording of evidence given by child witnesses in such cases. Is that gap to remain, or does the Minister intend to plug it in the near future?

Lord James Douglas-Hamilton: I shall look into that and write to the hon. Gentleman. If there is the possibility of a criminal case, discretion would be in the hands of the procurator fiscal, depending on the evidence. If it is thought that there has been criminal action but there is

inadequate evidence to bring the matter to court, it would go to a children's referral. This is an extremely sensitive area. I will look into the point raised by the hon. Gentleman and write to him about it.
If there are different standards of proof, there will inevitably be circumstances in which events within a family will merit the referral of a child but will not justify criminal prosecution of another member of the family. The child may require measures of care and protection even though the evidence available does not justify a criminal trial. Regrettably, there are cases in which there is insufficient evidence for a criminal prosecution but sufficient evidence for steps to be taken to protect the child.
The reference to stigma implies that a neighbour will readily know what has been said at a children's hearing relating to another family, but that is not so. The Social Work (Scotland) Act 1968 expressly prohibits publication of a report of proceedings at a children's hearing or before the sheriff. That Act prohibits revelation of the name, address or school of the child or the inclusion of any particulars calculated to lead to identification of the child. That is an important safeguard. Proceedings before a hearing are strictly confidential and members of hearings may not keep any report supplied to a hearing. Thus, if neighbours find out about unfortunate events within a family, it will not be from a report of what has happened at a children's hearing.
The hon. Member for Garscadden asked whether the subsequent consultation had been a little hasty. We consulted earlier with the Convention of Scottish Local Authorities, the regional and islands reporters groups and the Association of Reporters to Children's Panels. After further discussions, the reporters to children's panels made it clear that they were content with the Bill as it now stands and did not wish further amendment.
The hon. Member for Aberdeen, South (Mr. Doran) fairly and correctly pointed out that the ultimate aim should be the protection of the child. He made it absolutely clear that he believed that the majority of professionals working in this area—reporters, social workers and police—greatly welcomed the fact that the Bill would do away with a major difficulty in the proof of child abuse. He stated his opposition to the amendment mentioned earlier and was concerned that I was considering the matter further. Having considered the matter further, I should state that the weight of evidence is clearly in one direction, and I hope that the House will accept the position on that very important point.
I recommend that the Bill be given a Third Reading.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.

Orders of the Day — Electricity (Financial Provisions) (Scotland) Bill

Considered in Committee

[SIR PAUL DEAN in the Chair]

Clause 1

LIMIT ON BORROWING ETC. OF SCOTTISH ELECTRICITY BOARDS

Question proposed,That the clause stand part of the Bill.

The Minister of State, Scottish Office (Mr. Ian Lang): The Bill has one clause of substance and a single purpose which it is hard to think could reasonably be considered controversial. The purpose is to increase the borrowing limit of the two Scottish electricity boards so that they can continue to go about their normal business within the law. It has nothing to do with privatisation, although understandably the subject loomed large in our earlier debates. It might be helpful to the Committee if I were to say something about that.

Mr. John Maxton: Just to clarify matters, this is a two-clause Bill. I accept that clause 1 has nothing to do with privatisation, but has clause 2 anything to do with privatisation?

Mr. Lang: We shall debate clause 2 in due course. I contend that it has nothing to do with privatisation. If the hon. Gentleman thinks otherwise, we can engage in a lively debate on that issue shortly.
The purpose of the Bill is narrow and specific—to raise the financial limit on the borrowings of the Scottish electricity boards from £2·7 billion to £3 billion. Because the boards plan and operate the generating system jointly, the limit applies to the total outstanding borrowings of the two boards taken together.
The new limit will enable the boards to obtain the finances necessary to continue their capital investment programme and fulfil their statutory obligation to supply electricity. The boards' borrowing requirements are determined mainly by the level of their capital expenditure and the extent to which that can be financed from internal resources. Many of the boards' investments are large and the assets constructed will have very long lives. It is therefore unreasonable to assume that the boards could find the necessary internal resources without recourse to borrowing, although at March 1987 about two thirds of the boards' current cost net assets were financed from their internal resources. Obviously, Torness has dominated the boards' investment programmes in recent years. The station is nearing completion and reactor 1 began to supply electricity to the grid last month. Full commissioning of both reactors should be achieved by the first half of 1989.
New power stations are not the only capital projects undertaken by the boards. They have a continuing need to spend on updating their existing power stations and on maintaining and upgrading their extensive transmission and distribution lines. For example, the South of Scotland Electricity Board spends more than £33 million a year on extending its distribution network. The North of Scotland Hydro-Electric Board will be investing about £32 million

in connecting the Western Isles to the mainland system by submarine cable and is spending a further £23 million a year on refurbishing aging distribution and hydro assets.
A further factor of importance when considering borrowings is the level of the boards' costs and prices. The boards have a good track record in holding down their costs while delivering a high level of service to their customers. The recent Monopolies and Mergers Commission investigations into the efficiency of the two boards concluded that they were skilled in managing their core functions of generating, transmitting and distributing electricity and deserved their good reputations far conducting their business efficiently and well. However, the commission also suggested that there was scope in a number of aspects for further improvement.
This efficient performance has been reflected in prices. Over the past six years average tariffs in Scotland have fallen by 9 per cent. in real terms. Domestic prices in Scotland are lower than those in England and Wales. The latest CBI survey of electricity prices shows that electricity prices for general industrial consumers were among the lowest in Europe. I am sure that the Committee will find that evidence of efficiency reassuring.
It is clear from our earlier debate that there is no dispute about the need for the increased borrowing facility. The proposed new limit of £3 billion is expected to be sufficient to meet the boards' projected needs, with a modest contingency margin of 10 per cent. We are therefore taking the opportunity to repeal the power to amend the limit by order, because it is most unlikely that there will be any need to increase the borrowing limit further between now and the time that the boards are privatised.
Privatisation has been a focus of much of the discussion. on the Bill, as was to be expected in any legislation. affecting the industry at this stage with privatisation on the horizon. This is not the time for a detailed statement of our intentions, but I make no apology for reaffirming the Government's strong commitment to the implementation of their proposals to privatise the industry. One reason of direct relevance to the Bill is that the industry's investment needs will no longer be decided by Government but will be determined by the industry on the basis of its commercial assessment of its needs.
That is only one of the many benefits that privatisation will bring. The Government are in no doubt that the requirement to operate in the commercial and more competitive environment that privatisation will create will provide added incentives to and sustained pressure on the boards further to improve performance and minimise costs to the benefit of customers and shareholders. We are confident that our proposals for privatisation will create a more competitive private sector electricity industry to meet the challenge of the 1990s and beyond.
Following the White Paper, the shape of the two companies is being discussed with the boards. There is much detailed ground to be covered and the boards are being closely involved at all stages. The discussions are progressing well and we shall announce our decision in good time.
The key principles underlying our proposals are that they will facilitate and encourage competition to provide the best guarantee of the customer's long-term interests. They will provide safeguards and new rights for the customer, including a new system of guaranteed standards of service and performance indicators. They will establish


regulatory arrangements to promote competition, to provide incentives for efficiency, and to oversee electricity prices for the consumer. They will ensure the maintenance of the present standards of safety throughout the industry, particularly at nuclear sites.

Mr. Tam Dalyell: The Minister mentioned maintenance of present standards. Am I right in thinking that, as with the Central Electricity Generating Board, the SSEB has been advised by Merz and McLennan? May I repeat question No. 3, which I put this afternoon to the Under-Secretary of State for Energy? Where else in the world has Merz and McLennan, which operates in some 70 countries, ever recommended a system of distribution controlled grid operation? Where has it recommended the experiment that it is recommending here?

Mr. Lang: I have to give the hon. Gentleman the same reply that I gave him when he asked the same question on Second Reading. Merz and McLennan is a firm of distinguished technical advisers. It was part of the team advising the Government on the structure of privatisation, although the main role was carried out by merchant bankers. The hon. Gentleman's question relates to the English structure of the electricity system under privatisation. Since he asked his question on Second Reading, he has written to me about the matter. I shall let him have a reply in writing in due course. With the greatest respect, this is not a relevant topic in the context of this debate.

Mr. James Wallace: The Minister referred to the competition that could flow from privatisation. Will there be any restrictions on a company such as British Gas investing in the newly privatised boards? If British Gas invests substantially, will that promote or lessen competition?

Mr. Lang: That may be a suitable topic for discussion as we approach the formulation of our privatisation proposals. I shall bear the hon. Gentleman's point in mind. Because so many of these decisions have not yet been taken, I must confine myself to the general principles underlying our approach. The Government's proposals will benefit employees in the industry by providing wider career opportunities. They will give special rights to employees to acquire shares and give preference to customers in the allocation of shares. They will ensure security and diversity of supply and consolidate and update the legislation governing the supply of electricity.
Concern was expressed in earlier exchanges that security of supply might in some way be jeopardised by privatisation. I can categorically assure the Committee that such concerns are entirely without foundation. Following privatisation, the Scottish electricity industry will comprise two dynamic businesses which will be responsive to their customers' requirements. They will be under commercial and competitive pressure from other fuels and other electricity suppliers to deliver what the customer wants. Large industrial customers and domestic customers want the same guarantee of a secure supply of electricity at the lowest possible cost, and the system will deliver that.
The commercial pressures will be supported by a regulatory framework which will ensure that the statutory

obligation to supply which will fall on the licensed companies will be capable of being met. The companies will be under specific obligations as regards the security and quality of supply, and the overall price regulation will ensure that electricity is produced and priced at the lowest possible cost.

Dr. Norman A. Godman: Will these consumers' rights extend to those people, often on low incomes, who fall into arrears with their payments? As the Minister knows, some of them have their payments made by the DHSS. Will these rights continue, or, better still, will they be strengthened under the proposals to privatise?

Mr. Lang: Again, the hon. Gentleman is anticipating the detail of the legislation. There is already a fairly elaborate structure to try to help those in difficulties with their payments, governed by a code of practice on which the consultative councils have been consulted. We see no reason why there should be any substantial departure from those arrangements. Recently, the figures for disconnections have been more encouraging, and have been reducing. It is the boards' intention not to adopt a draconian attitude in this respect.
The matter of immediate concern is to ensure that the boards are able to finance their day-to-day business and their investment programmes. Clause 1 is an essential mechanism for enabling this, and I commend it to the Committee.

Several Hon. Members: rose——

The First Deputy Chairman of Ways and Means (Sir Paul Dean): Before I call the next hon. Member, I remind the Committee that a debate on the merits or demerits of privatisation would not be in order. On clause stand part, it is acceptable to speak, as the Minister has done, about the connection between that and clause I, but we cannot have a general debate on privatisation.

Mr. Donald Dewar: I am grateful for your warning, Mr. Deputy Speaker, and i shall try to go no wider than the Minister did. I was interested to hear his ringing statement of commitment to the privatised future of the industry. I must confess that it came as no surprise. It was a statement of faith, a sort of ex cathedra Dover house. It sounded as though the word processor had been hard at work putting together a particularly appropriate piece of special pleading for the Minister. I doubt whether it will impress anyone else, and it did not impress any of my colleagues. I particularly stress that because, apart from two Whips, the Minister is entirely alone on the Conservative Benches. That is a matter of some interest.
No one objects to the clause as it stands. There is no question of our dividing the Committee against it, unless the Minister manages to irritate us beyond the norm. As the Committee will remember, this measure was debated in the Scottish Grand Committee, which was a constructive gesture on our part. That does not mean, as I am sure the Minister will appreciate, that we are in any way endorsing his vision of the future or have any time for the legislation that we are promised will come soon.
We are aware that the Committee has to grant additional finance to help the Scottish electricity boards


through the immediate period that lies ahead. We are being asked to sanction an increase in the borrowing requirement to £3 billion, and it is only right that before the Committee does that we try to extract some information from the Minister. We have been plugging away for some time trying to extract information from the Minister, and I am afraid that we have learnt to appreciate that he is the master of the stonewall tactic. I admire the persistent shameless level of non-information that has become the Minister's mark, and extracting information from him is gey dreich work.
If the Minister maintains, as I suspect he will, his record of pushing off any reasonable inquiries about the reason why this additional cash is needed, or about the immediate plans for the industry that are to be financed out of this additional borrowing, he will underline the need, when we come to look at the detailed proposals from the Government, to do so within separate Scottish legislation. This matter was raised during the last two Scottish Question Times and I was alarmed at the casual way in which both the Secretary of State and the Minister of State tended to brush this issue aside as some sort of idiosyncratic and parochial point raised by the Opposition.
For example, at the last Question Time, the Minister said:
We are not ducking or dodging anything.
That will come as a surprise to everyone. He continued:
There is an appropriate time to answer these matters.
I should have thought that this was an appropriate time, when we are voting to increase the borrowing powers of the boards.
He went on:
Legislation has not yet been prepared or presented to the House. When it has been, that will be the appropriate time to answer these questions … I hear what the hon. Gentleman says about the Opposition's desire for separate legislation.
He then said something that I find rather disheartening
That will be decided at the appropriate time. The hon. Gentleman is as aware as I am that there are many matters which affect the industry both north and south of the border."—[Official Report,29 June 1988; Vol. 136, c. 351.]
The recurrent theme is that there is much that is common, with the implication that a United Kingdom Bill is being contemplated. We do not consider that to be satisfactory. It makes parliamentary scrutiny extremely difficult. I give the Minister notice that if he goes down that road it will be unpopular, and that it will be as unfair on English Members, who will have to sit through lengthy considerations of matters Scottish, as it will be on Scottish Members at the other end of that equation.
During the earlier Question Time, when dealing with that point, the Secretary of State said:
So far, neither of the chairmen"—
that is, of the two electricity boards—
has expressed any preference for a particular form of legislation."—[Official Report,25 May 1988; Vol. 134, c. 309.]
It would be helpful if we could go into greater detail about that. It might be interesting to know whether they have now expressed any preference, or whether they are being specifically consulted on this matter.
The financial limit is being raised to £3 billion, and—this is something that the Committee can properly consider—that will increase the level of debt that will have to be settled or apportioned in some way soon. This is a matter of considerable interest. The Minister may be able to escape many questions, but he cannot claim that it is

irrelevant to ask how the debts of the Scottish electricity boards are to be dealt with, probably within a few months. and certainly within a year of the arrival of privatisation.
That is important, because it is a sensitive matter. For example, the apportionment of the debt between the North of Scotland Hydro-Electric Board and the South of Scotland Electricity Board will have a considerable influence on the viability of the smaller company. We know that, in some rather slow, befuddled and confused way, the Minister is planning that these two free-standing enterprises, as he is proud to call them, will be enmeshed securely into the joint operating company that will run the nuclear facility. A great deal of the debt—the Minister referred specifically to Torness and the £1·7 billion that it has cost—will be geared to the nuclear capacity. Therefore, the apportionment, or division, of it, and how much will be written off and what kind of Treasury subsidy will be involved, become matters of pressing interest. We should know something about the matter, at least in outline, before we nod through this increase in the boards' financial limits.
I do not wish to transgress and try your patience, Mr. Deputy Speaker, but this is important and sensitive because we are awaiting a great deal of information about such matters as control of these companies and how control will be maintained, both in Scotland and in the wider forum of the United Kingdom.
I notice that on 29 June, when referring to foreign holdings, the Minister said:
I understand the right hon. Gentleman's anxiety—
that is, my right hon. Friend the Member for Glasgow, Govan (Mr. Millan)—
about this matter. It is an important issue and we are considering it carefully. There will be nothing wrong with a measure of foreign investment in the industry when it is in private hands, but I accept the right hon. Gentleman's anxiety about control or ownership being in foreign hands. That is something we shall consider closely, and we shall announce our decision at the appropriate time."—[Official Report,29 June 1988; Vol. 136, c. 350.]
We are going to get tired of hearing people say that something will be announced at the appropriate time. It is becoming something of a litany of despair for anyone attempting to take an intelligent interest in the Government's plans for the industry.

Mr. Bill Walker: The hon. Gentleman was probably not present during Energy Questions earlier today when the issue of the ownership of the privatised electricity industry was raised. Had he been here, he would have heard the Secretary of State say clearly that the Government intend to ensure that no single individual or groups of individuals, including foreign individuals, could obtain the kind of control about which he and I are worried.

Mr. Dewar: I am grateful to the hon. Gentleman. He has made an important point. I plead guilty. I was not present for Energy Questions today, for a variety of reasons. I have to say—I am sure that the hon. Member for Tayside, North (Mr. Walker) will sympathise with this—that the Secretary of State for Energy has made similar statements, while the silence from the Scottish Office has been deafening. It is a silence in the face of persistent pressure from us. I should be delighted if the Minister, either now or when he winds up the debate, will repeat that pledge for Scottish undertakings. That would be a considerable help to us. The Minister has refused to do so.


I have quoted his words from as recently as 29 June, less than a week ago. He has consistently failed to give that guarantee. That difference of approach is now beginning to worry some of us. I am grateful to the hon. Member for Tayside, North for saying that it is worrying hon. Members on both sides of the House.
We should know whether there will be a golden share, however cynical we may be about the Britoil-British Petroleum experience, or whether there might be a 15 per cent. limitation on foreign holdings, as was built into the articles of association for the Rolls-Royce privatisation. There are a number of models. I recognise that the details may not have been worked out, but I agree with the hon. Member for Tayside, North that the Minister should make an unequivocal statement, which was apparently made for the position south of the border, that there will be some such machinery for the Scottish electricity industry.
I do not want to rely on some of the rather pat words of Ministers. When talking about privatisation, the Secretary of State has said that the
unique and exciting opportunities to widen share ownership in Scotland must not be missed.
Perhaps they should not be missed, but the trouble is that those who do not miss them sometimes take up the opportunity because they know that they will be able to sell when the price is right. I am not sure that that is a satisfactory level of guarantee. Let us have a guarantee. Let us hear from the Minister today. Perhaps the hon. Member for Tayside, North and I can combine during the debate to extract what should be an easily given promise from the Minister. We want a statement of principle that is relevant to the clause, because we are allowing a substantial debt to be built up. The security of that debt may bear some relationship to the stability of the companies and the issues I have been discussing.
The Minister was good enough to talk in general terms about the efficiency of electricity supply. My hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) said that it seems extraordinary that the Minister should be at the Dispatch Box praising the efficiency of the electricity boards and saying how splendidly they are performing, while promising periods of uncertaintly and upheaval with the privatisation programme.
The Minister talked about investment. He said that a large percentage of the debt was invested in the nuclear installation. Perhaps he could tell us how much of the £3 billion programme will be directly related to the nuclear programme. If we increase the borrowing requirement, I assume that some of that money will be used to improve the supply side of the industry. I do not know whether the Minister can say anything about this, but there are frightening rumours about escalating costs of decommissioning old Magnox stations. That is relevant to the borrowing requirements of the boards. Perhaps I could tempt the Minister to say a word or two about that.
If we are talking about plant and equipment, perhaps the Minister should say, in general terms, something about the joint ownership of the nuclear installation and how it will work. He should say something about what, in political terms, we would see as boundary changes, plant swapping or perhaps just heat exchange contracts, which adjust the requirements of the privatised north and south boards. The Committee will know that there have been many speculative stories about population switches, about

Cruachan going to the South of Scotland Electricity Board, about Kincardine going to the north board and about what will happen to Peterhead, which is a key installation. As we are being invited to pass the new clause on the basis that the money is required for the improvement of plant, it is important that the Minister clarifies the position.
4.45 pm
I am sure that my hon. Friend the Member for Linlithgow (Mr. Dalyell) will raise this matter, but one of the most important parts of the static equipment and plant is the grid system. If the Minister is saying that the additional borrowing space is required to improve that machinery, it may be that some of the money will be spent on the grid system. If it is, we are entitled to know what will happen to it. I have been working on the assumption that there will be some sort of joint operating company and a separate Scottish grid. I suppose it is possible that the two Scottish boards will become partners in a national grid, although they would be dwarfed by the distribution companies south of the border. Whether it is separate or otherwise, I assume that there will be some sort of free-standing, giant holding operation. I use that contradictory bundle of terms because it is the sort of language that the Minister, puzzlingly, has been using about other parts of the new arrangement. The Minister owes us at least some explanation of how that will operate.
The Minister said a few minutes ago that consumer protection would be an important part of the new set up and that he finds the present position on disconnections encouraging. We will want to look at that closely, preferably in separate Scottish legislation. The Minister knows the example that I am going to quote, which is a startling, relevant and recent example. In the first nine months of 1987, under the brave new world of privatisation in the gas industry, the number of domestic disconnections in the United Kingdom rose by over 35 per cent. That is a frightening statistic. No doubt it is defensible in terms of tight commercial control of one's cash flow and in trying to maximise a return on capital for the shareholders, but it has substantial social implications. We should have a long hard look at that.
The Minister should answer some of the questions, at least in principle. I referred earlier to the future of the Peterhead plant. That is important, because it is said that by the early 1990s the Peterhead plant will be producing, by the use of sour gas, about 4 million tonnes of coal equivalent. The consequences of that for the energy industry, particularly the coal industry, are important. Before the end of the debate it is essential that the Minister should say a word about the coal burn and the implications of the clause for the coal burn. Clearly there is a real link between the financial limits of the boards, their buying policy and the mix of fuels used to provide electricity for the consumer in the north and south.
Many of my colleagues will remember that on 7 March we had a lively Supply day debate on this subject and that on 9 June on, Second Reading of the Bill, we tried hard to persuade the Minister to take an interest in the vexed and difficult question of the negotiations between the SSEB and British Coal over coal burn. The attitude was summed up in a now notorious quotation from Hansard. The Minister said:
I am not uninterested in the negotiations but I do not believe that it is right and proper that we should interfere in them."—[Official Report, 25 May 1988; Vol. 134, c. 317.]


That shows a level of casualness amounting to irresponsibility.
I corresponded with the Prime Minister on 8 March. She said:
Provided they"—
the boards—
can adopt a flexible and constructive approach, there is no reason to believe such an agreement will not eventually be achieved.
I do not believe that the Government can adopt such a stand-off stance. That was the beginning of March, it is now the beginning of July, and we are still faced with uncertainties.
Undoubtedly there is a link between the financial position of the board and the pressure that the Government place on its financial limits and its attitude to the purchase of coal. I ask the Minister to make an up-to-date statement of the position as the Government understand it. I am told—it is speculative as, unlike Ministers, I do not have direct access—that British Coal made an offer on Thursday and that the parties are in accord about the tonnage to be purchased until the end of March 1989 and the price to be paid for it. There is still a vital impasse over the way in which imported coal is to be used, especially at Cockenzie and Longannet. I am told that British Coal is anxious to limit the use of imported coal to Kincardine, which is a barrier to agreement. Even more important to the coal industry, the SSEB has made no concession that it will attempt to agree a long-term contract, without which the future of the coal industry will be bleak.
It is difficult to gather from the press exactly what is happening. At the end of last week a remarkably optimistic gloss was put on public reports, suggesting that an agreement was within grasp. I am told that that was optimistic and probably inaccurate. I do not know whether that is true. I offer it only as a suggestion that has been put to me.

Mr. Bill Walker: I do not like to repeat myself, but again this matter arose at Energy Question Time. My understanding of the Secretary of State's remarks was that, other than on one narrow detail, agreement had been reached.

Mr. Dewar: The hon. Gentleman is extremely helpful. He acts as an admirably efficient messenger boy for the Department of Energy. I wish that we received a similar service from the Scottish Office.
The hon. Member for Tayside, North made an interesting point, and I am sure that he reported it accurately. I am told—I concede that it is a caried story and that the Opposition are unlikely to be involved directly in these negotiations—that the narrow point is the commitment to a long-term contract and how much and where imported coal can be burnt. That leads to the vexed question of the existing contracts at Cockenzie and Longannet. It is important that the Minister clarifies the position.
I declare a constituency interest, because I understand that a United States boat, the General Estrella, came from Baltimore yesterday and entered Rothesay dock with 27,000 tonnes of imported coal on board. It is being unloaded and the coal is being carried on a reinstated spur of a railway line. It is important that at this stage we have some understanding of what is happening. If that coal is

taken by rail to Longannet and burnt, I suspect that we may be in a difficult legal arid practical position in which the House would have a legitimate interest.
I am entitled to draw attention to the fact that the Scottish Office—I welcome this—clearly believes that it has an interest in this matter. Today, a headline in The Scotsman,under the byline of Keith Aitken—its industrial editor, who I know is a responsible journalist—says:
Rifkind may intervene in SSEB coal row.
The report rehearses the evident difficult state in which we find ourselves. It says:
Mr. Rifkind is understood to have asked for a meeting in the early part of this week with senior BC executives in London, and may go on to see the SSEB, although the SSEB is responsible to the Scottish Office and is in regular contact with Ministers and officials.
If it is still in regular contact, I should like to know what that contact has brought. I unreservedly welcome this sign of life and activity in the Scottish Office, but if there are to be meetings this week with British Coal in which the Secretary of State will be involved, it is important that we know about them so that the phenomenon represented by the General Estrella at Rothesay dock does not become a crisis of confidence for the future of the industry.
I have raised a number of questions about the future of the industry. I hope that I have related them to the important extension of borrowing powers that the clause gives the electricity boards. The debate is opportune because we are facing a sharp crisis in the energy industry in Scotland. I hope that the Minister will answer some of those questions.
I was not in the least impressed with the Minister's opening statement about the merits of privatisation—the wonderful advantages to industry, the consumer, the nation, the environment, anything else that he might be able to think of or anything that his advisers can put in a long list. It is a peculiarly unsuitable industry for privatisation, even if it is assumed that privatisation is a sound principle—which is what the Government clearly assume. A monopolies industry is being converted from a public utility to what looks dangerously like a private monopoly. The fact that there are two monopolies operating in tandem does not remove the essential dangers. We are left with a sick joke of competition by comparison, which has rightly been derided throughout debates in the House and which will continue to haunt the Secretary of State for some time.
There are major arguments about the security of supply, the mix of fuel and energy that we use and the proper and basic concern, which should be the mark of government, for the energy industry and the individuals and communities at risk. While this is a dry little Bill dealing with the arithmetic of the borrowing requirement, behind that limited facade it raises important questions. At a time of such crisis and conflict over the role and operation of the electricity boards, the Minister should come out of his shell and try to live down his reputation as the greyest and most persistent stonewaller, and give us some insight into what is happening.

Mr. Dalyell: When I interrupted the Minister's opening speech, he said that the situation in Scotland was entirely different. He might not have been present at Energy Question Time today, but those of us who were heard the Secretary of State for Energy—or should we now call him


the chairman of the Star Chamber court—go out of his way to emphasise the part that he hopes Scotland will play in the overall privatisation of the industry.
That was the view of the Secretary of State for Energy. I do not have the exact words, but we thought that the Government had in mind the integration of the Scottish and English systems.
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That leads us to another matter. I do not know whether the Minister has been to the control room at Southwark, but some of us have taken the trouble to go there. We vividly remember the grid controller, Edgar McCarthy, and his colleagues showing us the big board on which were displayed, at the flick of a switch, the whole United Kingdom power supply and the number of units that were coming in from Scotland at a given moment. We were there during the middle of the day, and the number of units varied from 480 to 520, as is usual at that time. The Scottish contribution to control of the grid is absolutely vital.
We may not be talking directly about privatisation but rather about borrowing powers in the Bill, but that gives an opportunity to talk about the technical future of the industry. Does anyone really deny that, at best, the Government are embarking on an experiment that no one in the world has ever tried—the distributor-controlled grid system? I make no excuse for referring to my question 3 on today's Order Paper:
To ask the Secretary of State for Energy, pursuant to his answer of 9 May, Official Report, column 3, what information he has as to how many distributor-controlled systems of the type now proposed for the privatisation of electricity in the United Kingdom, have been set up on the advice of his Department's technical advisers, Merz and McLennan, in the other countries in which they have helped to install grid systems; and if he will make a statement
The Under-Secretary of State for Energy courteously saw my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) and myself, with his hon. Friend the Member for Bedfordshire, North (Sir T. Skeet), for an hour and a quarter last month. The adviser Russell Kennedy from Merz and McLennan and others were also there. I speak against a background of some rather detailed knowledge and excellent briefing on the issue. The truth is that Merz and McLennan has never, anywhere else, recommended the distributor-controlled grid system. Merz and McLennan is a distinguished firm of consultant engineers with a good reputation—that is not in doubt. However, Merz and McLennan has never put forward these particular propositions anywhere else in the world. The question arises why the Government think that they know better than all the technical advisers of the CEGB. I repeat my supplementary question: why do they think that they know better than Lord Marshall and, as I understand it, the unanimous technical advice from the CEGB and the SSEB?
My right hon. Friend the Member for Glasgow, Govan (Mr. Millan), who was a Minister, knows that the SSEB is in an extremely difficult position. It has obligations to the Government of the day not to speak out, yet it is not denied that all the technical advice is against the Government's proposals on grid control. I have become increasingly concerned about that issue. I therefore thought it proper to seek opinions from the Generation

Development and Construction Division of the CEGB, which also serves the SSEB. Those of us who have crawled over Torness and have been to Hunterston know well the contribution made by the office at Gloucester and the central research for the United Kingdom which is carried out at Barnwood. The points I raised with the Secretary of State come from the considered opinion of Dr. Bond and others, who are prepared to speak out and who have devoted their lives to the industry. They were distinguished engineers at Barnwood in the design, development and construction of generating plant. They say:
There are two primary areas of concern. The first and the one that has dominated consideration so far is the viability of the minute to minute operating system now provided under completely integrated management and control by the CEGB, namely optimum efficient and secure generation and high voltage transmission under all conditions of weather emergency and load demand variation.
I am advised that the whole issue of load demand variation has not been thought through. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) referred to the answers that we have been given. When we raised the matter in Committee, no convincing answer was given for a very obvious reason: the matter had not been thought through.

Mr. Lang: The reason why the hon. Gentleman did not get an answer that convinced him was that that point had nothing to do with the Scottish electricity system in our privatisation proposals, and still less with the Bill that we are debating today.

Mr. Dalyell: If the Minister thinks that load demand variation has nothing to do with the Scottish electricity system, he had better become a Minister in another Department and have no responsibility for power. That proposition is crass.
I wish to deal now with the issue of weather emergency conditions. Again, that is a matter that has not been thought through. After the gale that ravaged the south of England, engineers from my constituency and other Scottish constituencies, at the drop of the proverbial hat, without demur, rushed to Surrey, Sussex and Kent. I see that my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) is nodding. Many of them got letters of thanks from people in the south of England who thought that the Scottish linemen and engineers were superb in the emergency. If there is to be haggling about contracts and prices, will not there be delay? Will the engineers do such a job? Are we to be told that that, too, is irrelevant? It is, quite clearly, relevant.
The Barnwood engineers say that the second point is
the need for the continuation of, and adequate resourcing of, the formations that provide essential and, from the aspect of efficiency and cost effectiveness, irreplaceable support for the main line generation and high voltage transmission system. These functions in all their considerable diversity are embodied in, for example, the CEGB Research Division, Generation Development and Construction Division and Transmission Division.
The SSEB is intimately linked to the current operations of the CEGB transmission division.
The Barnwood engineers continue:
There appears to be some acknowledgement of the RD function and the function of the Transmission Division links in a simply understood way with the high voltage transmission system. However, the necessary role of GDCD in the ordered development of power station technology and in continuing responsibility of the long term reliability of


existing plant—a service which no consultant engineers provide or are resourced to provide—appears to have received no acknowledgement or consideration whatsoever.
I asked if there had been consideration of the views of the Barnwood engineers. If so, I should like to know what that consideration was.
The Barnwood engineers say that they are worried about the viability of the grid. They refer to an article by
Frank Ledger called,
The power to command and control Privatisation and the CEGB".
My colleagues may ask, "Who is Frank Ledger?" He is the board member responsible for engineering in the CEGB, so he might be thought to know something about it. He says:
The fundamental principle of the electricity supply system in the UK and indeed worldwide is the responsibility to provide a secure and reliable service. The key to fulfilling that responsibility is central control of the planning, co-ordination and operation of an integrated system which has evolved over many years and whose excellence is internationally acknowledged and sought.
Throughout the world, the dominant trend is towards fewer utilities and greater integration of generation and transmission, rather than towards fragmentation.
It is fragmentation that we are now discussing. The Government are going against what everyone else in the world is doing. People who do that may be right, but they had better be very clear of the technical basis on which they do it. Ledger goes on:
It is the power vested in the central control of the system in England and Wales which ensures that national optimisation of the system takes precedence over area and all other interests, and that the responsibility to supply is executed effectively.
How do we know that, in future, arrangements that have worked very well between Scotland and England will work in anything like that way when there is not overall control in favour of national optimisation? Ledger Continues:
Getting a power station from the drawing board and into operation is a lengthy process, as much as 10 to 12 years, and the current life expectancy is 30 to 40 years: so arguably one is looking as much as 50 years ahead. In that timescale there can be many changes which impact on a modern electricity supply system: sources of demand, sources and prices of fuel and raw materials, strategic need for fuel diversity daily and annual demand patterns, public opinion, and social and environmental pressures.
Then the crunch:
To manage these resources, the CEGB has developed a national planning and optimisation process to ensure that the electricity requirements for England and Wales are provided to a high standard of security at low cost. This process has been based on 30 years' experience of managing and operating one of the world's largest integrated power systems and relies on the central power to command in the interest of national optimisation.
Wherein lies now the central power to command which the engineers say is so important? Every one of us who went to Southwark could not say other than that the central power to command is absolutely crucial. Ledger continues:
For example, when a utility of the New York Power Pool did not respond to instructions from the central controller, New York was blacked out for up to 25 hours: there was mass looting, arson and even the closure of Wall Street.
There was a similar incident on 20 May 1986 when lightning struck the Sundon substation in Hertfordshire. Had there not been the central power to command, the whole of the home counties and most of London would have been blacked out by the voltage collapse, and enormous damage to the whole supply system would have been done.
5.15 pm
That could happen anywhere. It could happen in Scotland. It could happen to us. When there is power to command, however, at least something can be remedied. The grid controllers told us that they had two minutes and 40 seconds to do something. They were able to save the system because they had complete authority. The Americans did not and could not, yet the Secretary of State for Energy told us earlier this afternoon that we should understand that we are going on the American system. Things might look greener on the other side of the Atlantic, but they have not been so stable when it comes to the matter of the secure provision of electricity.
I do not want to take up time, but the technical case is devastating. The Barnwood engineers say:
Both these factors can make very sudden destabilising impacts on what is in any case an inherently unstable system handling very large power flows. The actual power being handled in this system can be as high as 48GW which, in old fashioned terms, is equivalent to 64,000,000 horse power.
I make this illustration to show how utterly ludicrous are the comparisons which politicians, consumer bodies and the media perpetually make with British Gas and British Telecom, the first being pretty well a simple distributive system somewhat akin to the electrical area distribution boards, and the second being somewhat similar in terms of network and also lacking the overpowering dynamic interaction between electricity generation and high voltage transmission which requires constant control and the optimum utilisation of very large power inputs obtained by conversion of fuel.
The CEGB Generation Development and Construction Division as formulated at present provides a comprehensive centre of architect-engineering excellence of world repute containing the whole range of disciplines required for the planning, development and construction of modern high efficiency power stations, both large and small. All the basic skills exist for the diagnosis and solution of any specialist problems that may arise in operation.
Are these facilities to be available under the new system without haggling? Time is of the essence. We have not been persuaded because we have not been told. The engineers continue:
This Division has evolved very successfully and has established an excellent record in the construction of major plant within estimated timescale and budget.
The division is to be broken up.
If this Division were to be broken up no small privatised body could support its equivalent.
Do Energy Ministers disagree with the engineers about that? If so, they had better say so.
An inefficient regime in which consulting engineers taking large fees and having no follow-up responsibility for the success and efficiency of plant, or for its engineering support in operation, would ensue. This is not speculation—it is the reason for the evolution of this Division.
Nor is it speculation. We are talking about the break-up of unique facilities which have been available to the SSEB, as to the Highland board and the CEGB.
Salient points to pick out from a very large mass of comment and detail are:
The Secretary of State's inference".
The right hon. Member for Hertsmere (Mr. Parkinson) made the inference in answer to a question asked on 28 March by my hon. Friend the Member for Motherwell, North (Dr. Reid). We were told in The Times:
Dr. Reid would find that Mr. Hadley no longer maintained that it would cost £1 billion. The figure, which was impossible to understand, had been based on the assumption that the Government would propose the creation of five vertically integrated power boards. They had not.
It was now agreed between the CEGB and his department's technical experts that, though there might be a


cost from the proposals, that cost could be substantially more than matched by the savings which would result. Dr. Reid's information was grossly out of date.
[Interruption.] The engineers side with my hon. Friend, not with the Minister.
The engineers say that the Secretary of State's inference:
is effectively denied in correspondence between the CEGB and Mr. John Lyons (General Secretary of the Electrical Power Engineers Association).
They also believe that:
it is essential to restore the basic command structure linking generation and high voltage transmission to preserve the core of the present system. This means retaining the present generation side intact and allotting a management role in the transmission company to this major generating company. Competition from additional private sources would not be precluded but could be permitted by suitable regulation of the grid management to allow completely open competitive opportunity. To be viable these additional sources would, of course, have to be genuinely competitive with the present system.
The rub is, what about the additional sources? We have not been told much about them.
The Barnwood engineers believe that
it is psychologically highly damaging to remove the obligation to supply from the generating side and that this must be reversed.
They point out in previous letters that
the governing ethos of the CEGB is public service and that a vital element of motivation will be lost if obligation to supply is removed.
The Government say that there will be an obligation to supply, but how will that be carried out? We have not been told how such an obligation will operate. It is one thing to say that there must be an obligation, but it is another to say how it will be operated.
The engineers say:
Merit order and commitment is to be replaced by a soulless regime of contracts and market forces-this is a prime blunder having regard to the traditions of this industry and must be unsound.
That is the view not of the politicians, but of the engineers who have to operate the system. They say:
A question relating to the proposed separately privatised transmission grid yet to be answered is how this will command the generators to generate and at what rate so as to protect the integrity of the power system under fault conditions? There is a clash of interest under circumstances when it may not be profitable or prudent for a generator to respond. For example to cut short a financially optimised programme of maintenance and to restrict the rate of loading of plant so as not to shorten the technical/financial life of the plant. Since the quantification of such matters cannot be predetermined, how would this be covered in a financially watertight contract between distributors and generators? And where does competition enter into this equation?
We have seen no specimen contracts between distributors and generators. I questioned the engineers and others in the industry about that, and I doubt whether any watertight contract could be drawn up to take care of emergency faults because time would not allow for the making of arrangements. For proof of that we have only to ask the Americans about the mess up under their system.
The Barnwood engineers say:
Government proposals contain nothing to replace the present CEGB statutory obligations on care of the environment. Also if privatisation goes ahead on the present basis there would no longer he an organisation with an overall view of needs or any requirement to consider the national good.

My friends in the SSEB make exactly the same point—not simply to protect their jobs or positions, but because they are serious engineers who have to undertake the job.
The engineers state:
The Government's vision appears to be tied to the assumption that the balance of usage of primary energy sources will remain much as it is now. By its proposals it is damaging greatly the ability of the generating industry to respond to future changes in this balance—splitting generation will weaken development resource and dividends will cream off development cash.
Given that we are discussing borrowing, what is the Government's view on the creaming off of development cash? Where will development cash come from? What will that do to electricity prices? The industry can borrow from the merchant bankers, but at some price and at some interest rates. We are entitled to ask what effect there will be on electricity prices.
Finally, the Barnwood engineers say that they
believe that the only economically and technically sound privatisation option is to privatise the CEGB basically intact with generating units operated in genuine cost merit order and a direct and immediate command, and existing economy of scale and resource for development retained. There are not enough corners to be cut off by competition as the Government visualise it to feed shareholders dividends and at the same time provide adequate development resource, without raising prices. The victim of this and of the technically unnatural and clumsy operational system proposed will be the consumer—twice over. In other words, the unnatural and costly distortions to be imposed on the present highly efficient and effective system are altogether too great to be acceptable. This is a matter of immense national importance which should come before silly party politics or the short term preservation of ministerial reputations.
I believe that that is what this is all about. The SSEB and the CEGB face break-up simply because of political dogma, and not because of any sensible, technical consideration.
My colleagues have been patient with me this afternoon. I know better than to hope for a considered and detailed reply from the Minister. However, I shall plague him, the Scottish Office and the Department of Energy with letters requesting answers, one by one, to the engineers' points. If the Government cannot persuade the engineers, there is a danger of embarking on a considerable folly to the detriment of Scottish consumers, the SSEB and the CESB. I thank the House for its patience.

Mr. Brian Wilson: My hon. Friend the Member for Linlithgow (Mr. Dalyell) made an interesting and erudite speech. It is a pity that there has been such a small turn-out of the Scottish political minorities to learn from it. The entire spectrum of these minorities—apart from the Minister—is represented by the hon. Member for Tayside, North (Mr. Walker). If ever erudition was wasted, it must be when addressing the hon. Gentleman.
The parliamentary ranks of the Scottish National party have found something better to do today than to discuss the Scottish electricity industry. In future they could be known as the three lost live wires——

Mr. Maxton: Three burnt-out fuses.

Mr. Wilson: That is not a bad description, either. They are probably in Kensington campaigning for Madame Cyn.
As my hon. Friend the Member for Linlithgow said, the Bill allows us to discuss the privatisation of the industry.


I have a particular interest in this matter, as my constituency includes Hunterston nuclear power station, which is the largest employer in it. In the months past—and no doubt it will happen in the months ahead—a lot of play has been made of what was in the Conservative party manifesto and therefore what people allegedly voted for last June. Let me make it absolutely clear that there was nothing in that manifesto that told the people who work at Hunterston or any other nuclear power station, or those who live near those power stations and who, therefore, have a legitimate interest in these matters, that they were to be privatised.
5.30 pm
On 8 May 1987, in the Largs and Millport Weekly News, the Conservative candidate, hitherto the Conservative Member of Parliament for Cunninghame, North, Mr. John Corrie, announced:
I am not happy about the privatisation of nuclear power stations. There has been a lot of talk in London over the past few weeks as to the sort of industry a new Conservative Government might privatise, but looking at the American examples, I really feel that safety aspects have to be kept up with nuclear power.
I am not convinced that it would be a wise move to privatise.
Mr. Corrie informed the readership of the paper that he had made his views quite clear to his bosses and he assured readers—hence my constituents—that no commitment had been made or given on the privatisation of nuclear power stations.
The evidence proves that there was no such commitment in the Conservative party manifesto and that it was something subsequently invented and done by stealth for the reasons that my hon. Friend the Member for Linlithgow discussed in some detail, namely, political dogma and—I was about to say the virility of Ministers, but, given the Minister concerned, it would be better not to go down that avenue.

Mr. Bill Walker: The hon. Gentleman made some reference to me in his introductory remarks. If he expects debate in this Chamber, he must expect people to listen to what he has to say. I have been attempting to listen to him, as I listened to the hon. Member for Linlithgow (Mr. Dalyell), and that is what the Chamber is all about.
Will the hon. Gentleman accept from me that those of us who were elected in Scotland on the Conservative manifesto left no one in any doubt that we would privatise the electricity generating industry? Those of us who were elected made that quite clear, but I cannot speak for those who were not elected.

Mr. Wilson: I am grateful to the hon. Gentleman for being here and listening. He has set a splendid example for his colleagues and it is a pity that so few have followed it. One wonders where the other eight are. I find it a remarkable concept that those who told the people of Scotland that the Government were going to privatise nuclear power were elected, and that those who took the precaution of telling the electorate that the Government were not going to privatise nuclear power were defeated. I believe that any rational observer will form his own judgment about that.

Mr. Walker: The hon. Gentleman has made my point for me.

Mr. Wilson: I sense that there are disputes within the ranks of the Scottish Conservative party, but we will not go into that.
Nobody who works at Hunterston or lives in that area was told that the nuclear power stations were to be privatised. On the contrary, the Conservative candidate for the area went out of his way to give the impression that privatisation had not been decided upon and that it was still a matter for debate. On this occasion I agree with my predecessor's strictures.
In support of that argument, the 1986 report of the European Parliament Committee on Energy Research and Technology stated:
alongside safety in design there must be operational safety. The public inspection auithorities monitor operators' compliance with the laws and regulations. However, experience has shown … that while the conduct of operators may be formally correct, it may still show considerable deficiencies. There is always the risk that the pursuit of 'cost efficiency' and the need to 'balance the books', so typical of the private sector, may lead to deficiencies in safety or the consequences of accidents being underestimated or even `covered up' … The attitude of management in nuclear installations must be completely different. In this area nothing must be left to improvisation, approximation or profit considerations. The government, which is responsible for ensuring public safety, can only fulfil this responsibility properly if in addition to exercising its 'supervisory' role in the operation of installations, it is also able, via the agency of firms appointed for the purpose, to play a direct part in the running of the installations themselves".
It is worth placing that on the record, because it is the case against the Government's proposals. If the assets of the telecommunications industry, shipbuilding or other industrial sectors are given away the result might be a deterioration in services and perhaps a loss of jobs, but the result would be as nothing compared with the consequences if something went wrong with nuclear power stations. They will be handed away by this Government to people whose prime motivation is profit. That is the strongest argument against the privatisation of nuclear power stations.
Anyone who has visited Hunterston or any other nuclear power station cannot fail to have been impressed by the commitment and investment to safety. I have visited Hunsterston and seen the simulator in the control room, which cost millions of pounds to install. Can anyone imagine that P and O Nuclear Power Station Ltd. would make a similar investment and effort?

Mr. Bill Walke: rose——

Mr. Wilson: I see that the hon. Member for Tayside, North is seeking to make up for those who are missing, so I shall give way to him.

Mr. Walker: Is the hon. Gentleman suggesting that the aviation industry does not invest in simulators and that the private sector of the aviation industry is unsafe? If so, does he feel unsafe flying up to and down from Scotland every week? What nonsense.

Mr. Wilson: There are some hair-raising stories about aspects of the transport industry. Frankly, if something goes wrong in that industry, where generally standards are extremely high—I cast no aspersions—we are talking about the loss of perhaps a few hundred lives. If something goes wrong in a nuclear power station, a much higher price has to be paid. Why should we take such a risk? Are Scottish people marching in the streets and saying that they are unhappy about the way in which the SS EB runs


its affairs? Are they saying that they want private enterprise to take over the nuclear power stations? That is an absurdity. There are a handful of zealots in the House, representing a minority of zealots in Scotland, who want to give away nuclear power stations to the private sector. In the case of the SSEB it would mean literally giving away those power stations, because that is the only way in which the Government will get anyone to take them off their hands, giving the high capital investment programme in which that board has engaged.
Where does the demand come from? Who does the Minister represent when he puts forward such a proposition? He does not represent the people who work at Hunterston and have given excellent service to that industry and to the wider community. He certainly does not represent the Scottish people, whose acquiescence to nuclear power stations is guaranteed only by the utmost confidence that they enjoy in the operation of the installations. There is no demand except from the political motivators of the scheme and the greedy people who will yet again get their hands on another piece of public property.
Where will the buyers come from? They will not come in significant numbers from Scotland. They will not come from the financial institutions with anything like the relish that those buyers will feel for the lucrative industry of the south-east. Undoubtedly some buyers will come from overseas and within a few years the Scottish power industry, presently a credit to our country, will be turned into a conglomerate owned by a wide range of people whose last commitment will be the good of the Scottish community, whose guiding motive will be profit and who are likely to cut corners in pursuit of that.

Mr. Dalyell: The guiding motive may be profit, but it is the considered opinion of the board member for engineering that disintegration would add £1,000 million a year to the cost to the consumer. If the Government disagree with that, they had better tell the board members that they are wrong.

Mr. Wilson: My hon. Friend is right. There is no doubt that the price that the people of Scotland will pay for this nonsense is higher tariffs. I am sure that some of my colleagues will pursue that argument. My plea is for the people who work at Hunterston and for those who live in the area who want continuity and security, but who are having this nonsense foisted on them. For once in their misbegotten existence, why cannot the Government leave well alone?

Mrs. Maria Fyfe: The debate has been proceeding for about one and a half hours and still we await the arrival of the three Scottish live wires. Other notable absentees from the Chamber are the English Tories, who profess such great interest in Scottish affairs and who turn up assiduously for Scottish Question Time. I note that the Scottish Liberals are absent, too, but my remarks are addessed to the English Tories, who attend Scottish Question Time deliberately to waste time, and who criticise Scottish Members for not speaking with a "bool in their mooths" so that they can understand them. Perhaps they have given up trying to understand expressions such as those used earlier by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), who

talked about something being "gey dreich". Perhaps they have all gone to Kensington to warn the dry-as-dust Tory candidate that he is in danger of Left-wing extremism and had better cool it a bit.
What I know about the technicalities of the electricity industry could be written on the back of a three-pin plug, so I shall not attempt to come anywhere near the speech of my hon. Friend the Member for Linlithgow (Mr. Dalyell), but I shall mention some anxieties that are shared by the women of Scotland, who generally take the responsibility for paying the household electricity bills.
The Minister has made no effort today or previously to reassure householders. When British Telecom was privatised, prices increased, the service became worse and there were longer waits for installation. The Minister was good enough to admit that people are generally satisfied with the SSEB and that they take for granted the fact that its service is excellent. The regular supply of electricity is so taken for granted that people do not even think about it, but a transfer to private hands may create circumstances in which we could not expect such a regular supply. All sorts of things break down in this life, but not normally our electricity supply, and, as some hon. Members have said, it has caused great anxiety in New York and other parts of the world when that has happened.
The Minister has not explained how privatisation will improve the lot of the consumer. We asked how it would affect prices. This afternoon the Minister said that there had been a 9 per cent. reduction in prices and that prices in Scotland were lower than those in England and Wales, but he made no commitment to ensure that prices will remain reasonable under privatisation. He said nothing about a better service. nor did he guarantee even the same level of service.
The Minister was asked about safeguarding the position of those who are unable to pay their bills. As we all know from our surgeries, many people are worried about their electricity being cut off and fear having to go through the winter unable to cook for their families. The boards work to guidelines, and as elected Members we can write to the boards and usually work out a satisfactory method of payment. All that the Minister has said in response to those anxieties is that he sees no reason why they should depart from the present code. We have heard those weasel words before. Those answers are no guarantee that there will be no departure from the present standards. The Government have seen fit to let old people die in the winter because of an inability to pay their bills, so what reason do we have to suppose that anything will be better under privatisation?
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The Minister talked about giving preference in share buying to customers. That had me puzzled, because everyone who lives in the SSEB area is a customer—unless they live in some remote village that still uses oil lamps. What the Minister meant was that the shares would be offered across the entire country. Even if ordinary people start out as share owners, we know from previous privatisations that they would not retain those shares for long. As the pressures of normal family commitments arise—to feed and clothe the children and pay the bills—they will have to sell their few shares. In whose hands will those shares end up? The answer is with the greedy pigs who


simply want to gain more and more from the Government's privatisation drive. It has nothing to do with service to the public.

Mr. Dewar: My hon. Friend may also wish to consider the fact that any concessions will be granted to the householder, which will mean that shares will be available, not to everyone in the family, but to the male figure of the family and no one else. On that basis, there may be an unbalanced shareholders' list.

Mrs. Fyfe: That point is very relevant, especially to the women of Scotland, because often the husband's name is on the electricity bill as the householder, but it is the practice for the women to ensure that the bills are paid. The Government should recognise that women may miss the opportunity. I am in a quandary here because I do not want the Government to offer shares to anyone, but if they are to privatise electricity, the shares should be available to all.
However the sale is conducted, and however many ordinary householders apply for shares, the shares will not remain long in their hands. They will end up in the hands of those who are already rich—the yuppies who are striving for more wealth for themselves. The last thing on their minds will be service to the public and the maintenance of the high standards of which the electricity boards can, rightly, be proud.

Mr. Alistair Darling: This may be the last occasion on which Scottish Members of Parliament have a chance to discuss the privatisation of the Scottish electricity industry in isolation, because I suspect that when the paving Bill is introduced later this year it will cover the entire United Kingdom. That is a matter of regret, but it is typical of the second-rate way in which the Government treat Scotland. When the Minister replies to the many points that have been made in the debate, including the detailed points made by my hon. Friend the Member for Linlithgow (Mr. Dalyell)——

Mr. Bill Walk: rose——

Mr. Darling: —we will hear a second rate answer, because that is all that the Government can come up with. Just look at the empty green expanses on the other side of the Chamber. Only one Conservative Back-Bench Member is here, and I shall now have to give way to him.

Mr. Walker: The hon. Gentleman should realise that one reason why we are not speaking is to give Opposition Members the chance to speak. That was done by agreement through the usual channels.
When the Labour party was last in office, with what Bill did it nationalise the shipbuilding industry—a United Kingdom Bill or a Bill that dealt with the interests of the Scottish dimension? Was it a first or a second-class Bill?

The Second Deputy Chairman of Ways and Means (Miss Betty Boothroyd): Order. I am sure that the hon. Member for Edinburgh, Central (Mr. Darling) will not stray down that road.

Mr. Darling: Indeed I shall not. It has nothing to do with what we are discussing. I shall say only that the hon. Member for Tayside, North (Mr. Walker) could have strung all his contributions together and called them a speech, as he seems to have made one in the course of the afternoon by intervening so often.
I turn now to the important issue of debt. It is proposed that the electricity industry should be allowed to borrow up to £3 billion. Last year's accounts for the South of Scotland Electricity Board show its indebtedness to be £1·9 billion. I make that point because I want the Minister to tell us what will happen to that debt in the event of privatisation. Will it be written off, as will happen with the Rover Group? It would be monstrous and scandalous if the people of Scotland were to have their industry taken away from them and were then told that the money that they had lent it was also going to be written off. It is incumbent on the Minister to tell us what will happen to the debt. Will it be written off, or is it to be privatised along with the industry, if that is what ultimately happens?
I recognise the Minister's problem: if he passes on all the debt with the electricity industry, he will find it difficult to sell off. He realises that the electricity industry is an unattractive proposition to investors. One of the things that the Government must realise is that Scotland cannot afford to buy the electricity industry. There is not enough money in Scotland to buy it, with or without its debt, so the Minister knows that if he does not do something about writing off that debt he will find it impossible to sell the industry. That is why I predict that he will write off some of the debt and we, the taxpayers, will have to foot the bill to make the industry a more attractive proposition. The Minister should come clean about this.
When the Minister spoke at the beginning of the debate he was happy to outline some of the benefits, as he saw them, of privatisation. Then, when he was challenged by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), he said that the Government had not yet discussed the details and was too early to say. The Minister cannot invite the House to endorse an increase in debt and then say that he does not have a clue about what will happen to that debt. Raising money is a serious matter, and people in the United Kingdom and Scotland are entitled to know whether the debt will be written off or whether there is to be some mechanism to ensure that we shall be repaid before those who buy the industry move in.
The more debt that the industry has, the more likely it is to be bought by institutional investors. The chances are that the control of the SSEB and the north board, far from resting in Scotland, will move to London, if not abroad. Only foreign institutions and multinational companies can afford to buy the electricity industry in Scotland. So, riot only will we lose our electricity industry, but we will find control moving to London or abroad. The industry will follow the example of Britoil and BP—the chain is endless. Scottish industry and resources will be stripped out merely because Scotland does not have the resources to buy the industry itself: nor should it be asked to do so, given that it already belongs to the people of Scotland. Why should we have to buy back our own industry? Why should the Government have the cheek to offer us the opportunity to buy shares in what we already own? That is nonsense and the Minister knows it.
What happens to the debt is important. If the Minister cannot answer my questions about it, perhaps he will turn his mind to one or two other matters. Why do the SSEB and the north board need to raise even more money? Where will it go? Perhaps it will have to be set aside for decommissioning nuclear power stations, about which the Government have been very quiet. The Minister must know that a large number of nuclear power stations throughout the country—some in Scotland—will have to


be mothballed soon. They will have to be cloaked in concrete for hundreds of years, and monitored and watched for as long. That will cost a great deal, and would-be investors will want to know what the Government's intentions are.
I want to know whether the money that we are being invited to approve this evening will go towards decommissioning, and what is to happen to nuclear power stations in the future. Again, the Government are quiet about that. They are keen to say that we need the benefits of nuclear power, but not so keen to discuss what will happen at the dirty end of the industry—at the end of its life. Will this increased borrowing be used to convert Inverkip power station to coal-fired burning? A little bird in the industry told me that that might happen. Inverkip is handily placed for receiving imported coal. It is oil-fired now and little used, although it was warmed up during the miners' strike. I am sure that the board might want to convert it to burning foreign coal. I repeat: we have the right to be told what the money will be used for.
The other thing that happens when one borrows a lot of money is that one incurs interest charges. Will not increased indebtedness lead to increased electricity charges? We were told when Torness was built that it would mean cheaper electricity for us all, but we have yet to see that. Electricity prices have yet to fall in absolute or real terms. If one invests heavily in the nuclear industry, capital costs are greater and so are borrowing charges—one of the reasons why the SSEB is so heavily in debt. What will be the repercussions of this increased borrowing? Will electricity prices have to rise even more? They are already going up by 4 to 5 per cent. to fatten up the industry for selling off.
The Secretary of State for Energy made it clear that the English and Welsh electricity boards would be unattractive propositions because of their low rate of return. Prices have risen in Scotland purely because of privatisation. We have 50 per cent. over-capacity in electricity, yet we have to pay increased charges. The irony is that Scotland, which produces a surplus of electricity, still contains people who cannot afford to heat their homes. The spectacle of representatives of the industry arriving at old ladies' doors with sledgehammers to break down the doors and remove electricity meters persists. That is intolerable.
It worries me that the industry is to pass to the private sector, to people who put a low price on safety because it undermines their profits, to people who want to squeeze every penny that they can get out of their customers because they have a stranglehold over them and the customers have no alternative but to get their electricity from them. It worries me, too, that all these questions remain unanswered because the Minister does not know the answers to them—or does not want to tell. The House is entitled to deride what he said when he introduced the measure and I suspect that it will deride what he has to say on winding up. He does not have answers. One of the difficulties is that he is not master in his own house. What he thinks or does matters not, because the whole operation is being controlled by the Department of Energy. When the announcement is ultimately made, it will be made by the Secretary of State for Energy and there will be a

supplementary press briefing by the Secretary of State for Scotland to say that he goes along with it. That is sad and it is why we have every right to be annoyed.
Towards the end of his speech the Minister started to laud the aims of privatisation—it was the usual speech churned out by the word processors in St. Andrew's house and Chester street. All the usual platitudes were uttered. The Minister said that many benefits would flow. As we always ask him this, and he never answers it, perhaps he will tell us now what competition by comparison means. When privatisation was announced it was made clear that, unlike now, when a matter can be raised with a Member of Parliament and thus in the House, there will be competition by comparison. If an Edinburgh electricity user does not like what the SSEB is doing, he can write a stiff letter to the chairman and compare the SSEB's actions with what is happening in Watford or Wick. Is that what competition by comparison means? The ordinary domestic customer, in other words, will be able to do nothing but grin and bear it. He knows that the board has a stranglehold over him. It is not realistic for him to ring up one of the other distribution boards and ask it to put a new electricity line into his house.
That contrasts with commercial users, who can opt out if they wish. If they do, that can only mean that the domestic consumer will have to pay more, as the board has an obligation to maintain supply. If its commercial users desert it because they do not like what is being offered, the domestic user will have to pay more.
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We are faced with a measure which, on the face of it, in uncontentious, but I suspect that it will present far more difficulty than the Minister might have expected. Of course, it is the precursor, the forerunner of privatisation, as is everything in the electricity industry that we discuss, but there are questions that the Minister should answer now, because the people of Scotland and of the United Kingdom have an integrated electricity supply and generation system that is the envy of the world. They have their complaints—who does not?—but now the Government are taking our electricity industry away from us and the well-off will be invited to buy it back if they can afford it, which is a novel concept of justice if ever there was one. The vast majority will find that they are the victims of people whose No. 1 aim is to extract profit. They will have no choice. One cannot choose whether to light one's house, as the Minister well knows.
Let us consider other privatisations. BT ruthlessly exploits its monopoly. It has behaved shamefully over Talkabout, where people have got into major debt. If that is anything to go by, we have reason to be concerned. Another example is P and O, where safety is not the No. 1 priority that it deserves to be. Therefore, all of us have cause to be concerned—both electricity consumers and those who live in the vicinity of nuclear power stations.
There is every reason to be worried about the Bill. As Opposition Members have said on many occasions, nobody wants it. Nobody asked for it. There are no obvious benefits. Even the Minister knows that he has run into great difficulties. It is no wonder that the Secretary of State for Energy is already looking towards the greener pastures of No. 11 or elsewhere, so that he can get out of it before the troubles cave in around him.
I hope that the Minister will tell us what is to happen to the debt. Who will control the electricity industry in the


event of privatisation? What can he say to the people of Scotland, who suspect that there will be higher electricity prices and nobody to complain to because the person who will impose those higher prices and run the nuclear power stations will live, not in Edinburgh, but probably in America or the Gulf? We do not know. We know that we are about to lose our electricity industry and we shall suffer because of it. It is all the more worrying that the Minister will probably be unable to say anything about it because either he does not know or he does not care to say.

Mr. Alexander Eadie: I apologise to the Minister for not being present to hear the beginning of his speech, but I am involved in the debate on the next Bill and had some work to do before I could join in this debate.
The Minister will have a good idea of why I feel compelled to intervene in the debate. My hon. Friends have been advancing the argument that, as the Bill involves the expenditure of a great deal of money, we are entitled and have the responsibility to raise issues concerning not only privatisation but the future operations of the SSEB.
My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) referred to the SSEB and British Coal dispute. It is no secret that the crisis between British Coal and the SSEB arose because of the Government's proposition to privatise the electricity supply industry. I remember the present chairman of the SSEB saying to me personally that there will always be a take from the SSEB with regard to Scottish coal. I do not think that the chairman will resent me reporting my personal conversations with him. He argued that Scottish coal was a national asset and it was everybody's responsibility to ensure that Scottish deep-mined coal was burned. Indeed, he argued that it was a strategic reserve for the people of Scotland. Therefore, the crisis between the SSEB and British Coal is born out of the proposition to privatise the electricity industry.
My hon. Friend referred to the attempt to obtain an agreement between the SSEB and British Coal to burn Scottish coal in its power stations. The Minister must be aware that today is a significant date, so his reply to the debate will be significant, because today marks the end of the three-month pause or standstill during the endeavours of the electricity board and British Coal to reach an agreement. The conduct of the Government in trying to obtain an agreement has hardly been starry. When we have asked questions, we have always been told that it is a matter for the commercial judgment of the SSEB and British Coal.

Mr. Allan Stewart: Hear, hear.

Mr. Eadie: I hear what the hon. Gentleman says, but on the eve of the previous debate on the privatisation of electricity, for the first time in history the Scottish Office opened on a Sunday and we were told that the Secretary of State for Scotland would make a specific announcement to the House to resolve the problem, but there was no statement but pandemonium in the House because the only thing that was said was that it was a matter for the commercial judgment of the SSEB and British Coal. We challenged that.
Some of us went to the Library to look at the terms of reference passed by Parliament for the SSEB appointments. We knew that the Secretary of State was the one who appointed those people to the board. In short, he was

the master. If he wanted—he did not—he could tell the SSEB to reach agreement with British Coal. It was one of the most despicable episodes that we have seen when the Secretary of State and his Ministers denied to some extent the Act passed by Parliament, which contained the safeguards.
My right hon. Friend the Member for Glasgow, Govan (Mr. Milian) intervened in that debate. He said that a similar situation arose when he was Secretary of State for Scotland when there was a problem between British Coal and the SSEB and he had to intervene. He had the powers to do so, which are the same as those of the present Secretary of State. But he forgot to say that I was present at the meeting as a Minister in that Government, when we managed to resolve the problem. Some of my hon Friends have said in this debate that the Government's attitude is born of the dogma of privatisation. They do not want to help because that dogma has penetrated their brain. Whether it is beneficial to the nation is beside the point.
I said earlier that we are discussing money and that the time to reach an agreement expired today. Today I had the fourth question to the Secretary of State for Energy and I asked him what the hell was going on in Scotland because thousands of jobs were at stake, not just in coal mining but in engineering and the railways. We can calculate the knock-on effect, which would be the slaughter of the deep-mined coal industry in Scotland. What reply did I receive? In effect, the Secretary of State said that my anxieties were unfounded and that he would shortly announce that an agreement had been reached between British Coal and the SSEB. I pointed out to him the report in The Scotsman today that no agreement had been reached, but there was a dispute about the importation of foreign coal. It states that, because of the bad relations between the two sides, the issue may have to be decided in the courts, where previously Lord Prosser gave a decision.
Since the Secretary of State gave me that specific undertaking, I have received information that the House and I were misled. The SSEB and British Coal are not on the verge of reaching agreement and that is why I am intervening. The Minister has a responsibility, when he replies, either to say that his right hon. Friend misled the House or that his right hon. Friend is correct and he, as the Scottish Minister, expects to announce an arrangement or an agreement between the two. There should be no shilly-shallying. In some people's eyes this debate may be minor, but it is not in the eyes of the Scottish people. They are already worried about privatisation as well as the thousands of jobs which will go down the drain if an agreement is not reached. The Minister must reply specifically.
There has been some discussion about the role that nuclear power will play in a privatised electricity industry. We hear all sorts of arguments and there may even be differences of opinion. Some say that it is unwise to depend on nuclear power, whether or not that industry is privatised. Some argue that it is an unforgiving technology, and I agree. That is a fair argument in view of what happened at Chernobyl and Three Mile Island.
The other argument is whether the economics of nuclear power are what we have been led to believe. Lord Marshall is on the record as saying that they are suspect, and he is pro-nuclear and in favour of pressurised water reactors. He used to be my scientific adviser and I know that he holds a different opinion from the SSEB. There were volumes of evidence on this at the Sizewell inquiry.
I do not rest my case for an examination by the House into the economics of nuclear power only on the opinion of Lord Marshall. I do not know whether the Minister has been advised of an international report on energy published by the Financial Times. It made some outstanding statements and disturbing declarations about competition, and the Government want competition. They think that, with competition, energy will be cheaper for consumers, although we have repeatedly shown that privatisation will mean increased electricity prices.
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The report states that nuclear power may well become uneconomic in the 1990s. There may be other reasons for nuclear power, but as we are discussing money the Minister must come clean about the financial aspect.
If the Minister is saying that it is in our strategic interests to develop a nuclear power programme, he must also argue that for coal, which is an indigenous resource. For many years I discussed coalburn with the chairman of the SSEB and he argued that it was in our strategic interests to have coalburn and coal mining in Scotland. What has changed? Is it the Government's dogma of privatisation? My hon. Friend the Member for Linlithgow (Mr. Dalyell) elaborated successfully on the nonsense of that unproven system. During Energy questions my hon. Friend described how the same adviser was advising foreigners on the grids as the Secretary of State, and his advice to foreigners contradicts the structural position that we shall have.
I hope that the Minister will tell the House specifically whether an agreement has been reached or is about to be reached between the SSEB and British Coal.

Mr. John Home Robertson: I apologise to the Minister and the Committee for not being present for his opening speech, and I assure him that no discourtesy was intended.
It would be a particular pleasure to hear from the Minister about electricity generation because he has the unique distinction of being a Scottish Conservative Member with an electricity generating facility in his constituency. He could argue that he has a mandate to privatise the Tongland hydro-electric scheme—a mandate which is singularly lacking in other localities with electricity generating facilities in Scotland. As we imagine the depleted ranks of 10 Scottish Conservative Members—that is all we can do—only the Minister has the authority to speak on behalf of electricity generating facilities operated by either of the electricity generating boards in Scotland.
My hon. Friend the Member for Cunninghame, North (Mr. Wilson) has already mentioned that the biggest single employer in his constituency is a power station—Hunterston. The same goes for my constituency of East Lothian. My hon. Friend the Member for Dunfermline, West (Mr. Douglas) and I share the distinction of representing two power stations—in my case, Torness nuclear power station and Cockenzie coal-burning power station. There is no evidence of any support in my constituency for the privatisation of either power station. On the contrary, there is much concern about Cockenzie's future under the privatised regime, given the background of generating capacity imbalance in the United Kingdom.

There is also considerable concern in the neighbourhood of Torness about the undermining of safety standards, which would inevitably flow from the commercial pressures that would develop following privatisation. It is imperative that proper controls and safeguards are retained in the operation of all kinds of nuclear facilities in Scotland, but, given the problems of commercial management, there is genuine doubt about whether that will be possible.
My hon. Friend the Member for Linlithgow (Mr. Dalyell) spoke at length about considerations affecting the CEGB. The Minister will not be surprised to hear me make a passing reference to the glaring disparity between the commitment to the principle of good neighbourliness where the CEGB is constructing nuclear power stations, and what applies under the responsibility of the SSEB. I refer, of course, to the substantial budget available to the CEGB for a "good neighbours" programme in, for example, the Sizewell area, where it is spending hundreds of thousands of pounds on community facilities—supporting village halls and community centres, and even refurbishing a cinema. Nothing has been done directly by the SSEB to help to deal with the disruption caused to the local economy in the Dunbar area as a consequence of the construction of Torness.
The Minister knows all about this, because I have been in correspondence with him. I understand that meetings are taking place between East Lothian district council and the SSEB, and I hope that there may yet be some prospect of the imbalance being put right. It is intolerable that communities in England should have the benefit of support when they are disrupted by major construction projects, while their counterparts north of the border have no access to similar funding.
A number of my hon. Friends have spoken about the prospects for coal burning in Scottish power stations. This is of immense importance to my constituents who are directly employed at Cockenzie power station, and to my constituents and those of my hon. Friends who work in the pits that supply the coal to the power station. We have waited for a long time for some indication of genuine commitment on the part of the Government, who are supposed to be responsible for energy in Scotland, to intervene to ensure that Scottish coal will continue to be burnt in Scottish power stations. At last, after all these months, we see some stirrings in new St. Andrew's house. The report in The Scotsman today that was quoted by my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) suggested that the Frankenstein's monster of the Secretary of State for Scotland was moving at last, and might say or do something to ensure that the industry that is supposed to be his responsibility would continue to burn Scottish coal.
My hon. Friend the Member for Linlithgow referred to the possibility of a catastrophe in the event of a shortfall in electricity generation capacity at times of peak need. I suppose that there is not much risk of that happening in Scotland, technically at least, because the Government have managed to manoeuvre themselves into a position in which there is about double the generating capacity of the maximum likely demand for electricity in Scotland at any one time. We have all that spare generating capacity, with, sadly, no prospect in our depressed economy of encouraging more consumption. The only market is south of the border.
It seems to be possible to construct all these power stations, with the ability to generate electricity, but we are still waiting for the interconnect facility that will make it possible to transmit the electricity down the wire to the potential market south of the border. We have had some fairly positive responses from the Secretary of State for Energy, but we are still waiting for some similar indications from the Scottish Office. Of course, a major expansion of the interconnect between Scotland and England would take a long time. We all know from bitter experience the difficulties that can arise—for instance, planning consent—over the construction of new overhead pylon routes. What line are the Government taking?

Mr. Dalyell: May I intervene, for the sake of accuracy? After all, we have to be extremely accurate about these matters. I was referring to a potential voltage collapse specifically on 20 May 1986, when lightning struck the sub-station at Sundon and resulted in what could have been chaos had the CEGB not had complete control of the grid.

Mr. Home Robertson: I understand very well what my hon. Friend was talking about. The point that I am trying to highlight is the lack of an adequate interconnect between the two systems. If advantage is to be taken of generating capacity in Scotland by our neighbours south of the border, it can be done only if there is sufficient capacity in the transmission grid to enable the electricity to be used.
We are dealing with a small Bill that provides for an increase in the borrowing of the SSEB and the hydro board. I fear that unless we are told that it is the Government's policy to continue to burn Scottish coal in the existing Scottish coal-burning power stations, this could represent a double cost. Borrowing money to pay for imported coal, or facilities for handling it, will then have to be paid for by Scottish electricity consumers. It will have to be paid for all over again as a consequence of losses in employment and the depression of the economy, because we shall not be burning our own coal. It is imperative that the Government assure us about their willingness to intervene directly to ensure that Scottish coal-burning power stations will continue to do the job for which they were originally constructed—to burn Scottish coal and to provide electricity for Scottish consumers.
Finally, I want to make a detailed point about the privatisation proposals that the Government keep going on about, which, as they know, are universally opposed in Scotland. I keep reading about rumours of changes in the boundary between the hydro board and the SSEB to make it easier to privatise two separate entities. It has even been mooted that the Cockenzie power station might be transferred to the hydro board, which serves the north of Scotland. That is causing some surprise and uncertainty among my constituents who work at Cockenzie. We have nothing against the hyro board, but this is the first time that I have heard it suggested that East Lothian could have anything to do with the highlands and islands.
As the Bill must clearly be seen in the context of the Government's privatisation proposals, perhaps the Minister could take this opportunity to clarify the present doubt about the way in which the division between the hydro board and the SSEB may be adjusted in accordance with the Government's plans.

Mr. Gavin Strang: Like my hon. Friend the Member for Midlothian (Mr. Eadie), I had an oral question answered by the Secretary of State for Energy on the urgent and vital subject of the future of the Scottish coalfield. That is what is at stake in the current negotiations between the South of Scotland Electricity Board and British Coal.
The Secretary of State made a statement today which was not discouraging as regards the long-term future of the Scottish coal industry, and when my hon. Friend the shadow Secretary of State for Scotland led a deputation to meet him some months ago he was by no means dismissive of the case for a deep-mining industry in Scotland. When the Secretary of State referred to an imminent agreement, my hon. Friend said that his information was that no such agreement was imminent. That apparent contradiction can be resolved in the following way.
6.30 pm
The coal industry in Scotland needs a long-term agreement. Decisions about investment in the industry are taken not one year or even two or three years ahead, but in some instances five to 10 years ahead. Pits cannot be sunk overnight and major decisions cannot be based on short-term considerations. It is clear that the agreement to be announced between British Coal and the SSEB will not be a 12-year agreement, although that is what is needed. It will not even be a four-year agreement. I suspect that it will be a deal taking us no further than the end of the current year and that the Secretary of State's reference to volume and price related merely to the current year. That is not an agreement. It is simply an interim arrangement to postpone the ultimate decision.
Incidentally, the Secretary of State's reply to my hon. Friend the Member for Midlothian was uncalled for and in no way justified by what my hon. Friend had said. The Secretary of State did not. actually refer to flexible working, but that is what he meant when he said that Scottish miners needed to concede even more than they had in relation to the operation of machinery at maximum capacity. My hon. Friend the Member for Kirkcaldy (Dr. Moonie) will confirm that that is certainly a factor in the discussions about the future of the Francis colliery. The arguments about flexible working are not nearly so glib or straightforward as is suggested in the quality press, let alone the tabloids. Whatever the arguments for arid against, anyone who knows the situation is aware that the Scottish area and its NUM leadership are ahead of most other areas, if "ahead" is the correct expression, in terms of developments in that direction. It was therefore unfortunate that the Secretary of State sought to raise that issue today, albeit only in passing.

Mr. Eadie: My hon. Friend mentioned the tabloids. The astonishing fact is that in Scotland not only the quality papers but the tabloids support the need for a deep-mined coal industry in Scotland. That is highly significant in the context of these discussions.

Mr. Strang: I am grateful to my hon. Friend. I do not wish to make too much of this, but I was surprised at that throw-away reference in the Secretary of State's reply to my hon. Friend today.
The real issue is what happens in the coming days, because that is when the decision will be taken in relation to the future of the industry. It may well be unprecedented for the Secretary of State for Scotland to be meeting the


chairman of British Coal, as the Secretary of State for Energy confirmed today. We understand that the meeting is about privatisation, although the press briefing suggested that it was a routine meeting. The crunch issue is what is to happen to Scotland's coal industry.
Following the exchanges today, I wrote to the Prime Minister reminding her of her letter to me in relation to a question that I put to her about Lord Prosser's judgment. We felt that the Prime Minister had made a statement when the whole issue was sub judice.
Lord Prosser made it absolutely clear that it would be a catastrophe for the Scottish coal industry if imported coal were burnt at Longannet and Cockenzie and that
it would be premature at least to embark now on a course with such a potential for disaster for the Scottish coal industry.
That is why it is monstrous for the SSEB—without, one hopes, the support of the Secretary of State for Scotland—to be trying to force British Coal to burn imported coal at Cockenzie and Longannet this year. That is the main reason why an agreement has not been reached. I was glad to hear the Secretary of State for Energy say today that the Secretary of State for Scotland would be putting the Government's position—in other words, that he would not just be putting his own position or that of the Scottish Tories, which is to write off the whole industry so as to help sell off the SSEB.
I hope that that means that the Secretary of State for Scotland will not have a mandate to browbeat British Coal tomorrow into conceding on that fundamental issue—the burning of imported coal at Cockenzie and Longannet—which would make a complete mockery of the proceedings of the Court of Session. I must tell the Minister that we are frankly suspicious of his right hon. and learned Friend's intentions. In discussions with Scottish Office Ministers and Ministers from the Department of Energy, Labour Members gained the impression that the latter were more committed to the Scottish coal industry than was the Secretary of State for Scotland. It is easy to understand why that is so. The Secretary of State for Scotland seems to have got it into his head that the SSEB must be given a completely free hand to facilitate the sale of the electricity industry to the private sector.
That, however, is a minor issue in the context of the real problem of privatisation of the SSEB. As the Minister knows, the real problem is the huge proportion of electricity to be generated, especially in the future, by nuclear power. Private investors do not like nuclear power. They are unhappy about the risk of what could befall them if something went wrong and about the unquantified costs of decommissioning and getting rid of installations when they reach the end of their useful life. Set against that, the idea that the electricity industry needs to have the whole future of the coal industry in its hands is entirely misjudged.
The fundamental issue is whether the Government accept any responsibility for the Scottish economy. Successive Governments have invested hundreds of millions of pounds in the Scottish coal industry. I was told in a parliamentary answer today that the present Government have invested £125 million in the past five years. It would be utter nonsense for all that investment to be written off, but that is what is at stake in the medium

to long term. It is not just the reopening of the Francis, which we all hope will take place, but the possible elimination of the entire Scottish mining industry.
It is nonsense to consider jeopardising our balance of payments for a temporary short-term price gain. We cannot run an ever greater deficit without some recognition of the importance of investing in our own industries. We are concerned, above all, not just about miners' jobs but about the many thousands of jobs in Scotland which depend on the coal industry. That is why I hope that the Minister of State and Secretary of State will not be persuaded, in the attempt to facilitate privatisation of the SSEB, to allow short-term considerations to justify browbeating British Coal into accepting a deal which can only mean the beginning of the end for deep mining in Scotland.

Mr. Maxton: This has been an interesting debate, ranging across the issues of privatisation of the coal and electricity supply industries in Scotland. I congratulate the hon. Members for Eastwood (Mr. Stewart) and for Tayside, North (Mr. Walker) who, separately or together, have attended all the debates. I am not sure whether they have been deliberately spelling each other so that they can go for cups of coffee or tea, but I give them their due.

Mr. Dewar: They have not spoken.

Mr. Maxton: In part, that is true. They are loyal to their Front Bench. One has been a Minister and has no intention of ever being a Minister again and the other will never be a Minister, so their loyalty is strong. Their interest in the electricity supply industry is much stronger than that of the Social and Liberal Democrats or the Scottish National party, whose representatives have failed to be here throughout the debate.
It is astonishing that the hon. Member for Banff and Buchan (Mr. Salmond) has not bothered to come here. He makes many noises around Scotland about what the SNP will do, is a member of the Select Committee on Energy and just this morning had a report in The Scotsman about nuclear waste dumping in Scotland—a vital matter in relation to the supply industry. Recently I read that he was the man that we most loved to hate, but I can have no relationship with him at all. He is not here often enough for me to have a relationship with him, whether one of love or of hate. He is never in the House to contribute.
The Minister said that the Bill had nothing to do with privatisation. Although he made some general remarks about the future of privatisation in Scotland, he was not prepared to give any details because he believed that to be irrelevant. It is worth looking at the financial and manpower effects of the Bill as described in the explanatory and financial memorandum. The Bill increases the borrowing powers of the Scottish electricity boards by some £300 million—not £3 billion, because most of the money has already been borrowed. The explanatory and financial memorandum says:
The Boards may borrow either from the Secretary of State (who in turn borrows from the National Loans Fund) or from other sources. If they borrow from other sources, the Treasury may guarantee the borrowing.
I notice that the word is "may" and not "must". The explanatory memorandum continues:
Should the Boards use their increased borrowing power to borrow from the Secretary of State, advances from the National Loans Fund would be increased accordingly. Should they borrow elsewhere with a Treasury guarantee, there would be a corresponding increase in the contingent


liabilities on the Consolidated Fund … Any payments under the Treasury guarantees from the Consolidated Fund must be repaid by the Boards to the Fund.
What will happen after the Bill is passed and if the boards seek that extra money? As there will be no financial implications for the Government, the boards will be encouraged to borrow from other sources rather than from the Secretary of State.
If I were the general manager of the Royal Bank of Scotland, Clydesdale bank or some other financial institution and were approached by the SSEB for a loan, I should want to know the board's future structure. I should want to know first whether the Treasury's guarantees under the Bill would continue once the company were privatised. Before I lent one penny to the new board, I should want to know whether the money that the SSEB was borrowing for its capital structure would remain in that board's hands or whether it would go to the North of Scotland Hydro-Electric Board.
What will happen if there is a split and a redrawing of the boundaries between the two hoards? We have been given no details. We do not know which power station will go where—which will go to the NSHEB and which will remain with the SSEB. If I were lending money to either board, I should want to know the future boundaries. The boundaries would make a difference to whether the boards had the ability to repay a loan and pay the interest on it.
6.45 pm
Will the outstanding debt of both boards be written off by the Government when they are privatised? If that happens, the Bill is of direct relevance to the structure of the privatised industry. If I were lending money, I should want to know what would happen to any money used on nuclear power developments. We have no details of the new structure and do not know what control the new boards will have. We know that the new structure is to be different and that the nuclear power stations will be owned jointly. If I were lending money, I should want to know what will happen to the debt.
The Bill is of direct relevance to the concept of privatisation. Members of Parliament may be responsible for lending money to the boards, so we have a right to know the future structure of the privatised industry before the Bill becomes law. We do not want glib references by the Minister. We want to know now.
We must return to the issue of foreign control. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said that the hon. Members for Tayside, North and for Eastwood had not spoken but, to be fair to the hon. Member for Tayside, North, he intervened two, three or four times—I am not sure how often because the hon. Gentleman seems to intervene more often than he does in reality—and some of his comments were important and relevant to the debate. He said that this afternoon the Secretary of State for Energy gave guarantees on foreign control of the electricity boards. The Secretary of State for Energy can given no such guarantees because he is not responsible for the two Scottish boards. They are the responsibility of the Secretary of State for Scotland and the Minister of State. I hope that the Minister will give us that same guarantee—that there will be no foreign control of the two Scottish electricity boards. Many Opposition Members would wish to interpret the right hon. Gentleman's comments slightly differently from the way in which Conservative Members would interpret them——

Mr. Bill Walker: The hon. Gentleman is going to be racist.

Mr. Maxton: I am not. Most Opposition Members and the people of Scotland believe that foreign control would include England as well as Scotland—[Interruption.] Conservative Members may mock, but we do no want the electricity supply industry in Scotland eventually to be owned by the CEGB. That is not beyond the realms of possibility. It would make nonsense of the Government's plan. I hope that the Minister will give us guarantees about foreign control and about the in-built independence of the Scottish boards from control by any of the English boards. That is vital.

Mr. Eadie: We have had numerous debates on Bills that deal with ports, such as the one we are to start at 7 o'clock. Speeches have been made during those debates about the South African stake in the electricity supply industry. There is nothing in the replies that we have had to persuade us that a delegation or a deputation from South Africa did not come to this country, and was encouraged to think about——

The Second Deputy Chairman of Ways and Means: Order. That has no relevance to the clause under debate.

Mr. Maxton: I accept what you say, Miss Boothroyd, although my hon. Friend the Member for Midlothian (M r. Eadie) is making an important point. The clause is about borrowing £300 million. If I wanted to lend the boards money, I would want to know whether, built into this future structure, there was the ability to ensure that foreign control could not be brought in. Alternatively, I might want to know that it was to be brought in. I would simply want to know one way or the other whether a privatised company could be foreign controlled. If I did not know that and there was, for example, a large South African shareholding in the boards and, at a future date, the South African Government changed——

The Second Deputy Chairman: Order. I have already given a ruling on this. I ask the hon. Gentleman to refer to the clause under debate.

Mr. Maxton: I take your point, Miss Boothroyd.

The Second Deputy Chairman: I hope so, and I hope that the hon. Gentleman wilt proceed with debating the clause.

Mr. Maxton: I will do that, although I hope that the Minister will take the opportunity, when talking about the lending of money, to give us some idea whether foreign control would be allowed, and, if so, how.
I hope also that the Minister will explain how there will be competition in the provision of domestic electricity in Scotland. How am I, as a user of electricity in Hamilton, to be able to say to my electricity board, "Supply me with cheaper electricity or I will go to another board"? That will not happen. There cannot be competition in those circumstances.
I hope that the Minister will use his best offices as a Minister of State, along with the Secretary of State whom we keep hearing is a powerful member of the Cabinet who presses the interests of Scotland, to ensure that we have a separate Bill. The Minister must answer the questions about the coal industry that have been asked by my hon. Friends. He is responsible for the SSEB. It is not


privatised, and the House has not passed a Bill giving it any legal status. Therefore, the Minister is also responsible for the industry in Scotland, and in particular the coal industry, in its broadest sense. He has a responsibility to see that the electricity boards and British Coal are brought together to ensure the future of the British coal industry. If he does not, it will be a major indictment of him, as the Minister in charge of industry, and of the Government, who have already been rejected by the people of Scotland. The few remaining Tory Members who represent Scottish constituencies will lose in the next general election if the Government are the architects of the destruction of the coal industry in Scotland.

Mr. Lang: The hon. Member for East Lothian (Mr. Home Robertson), in his contribution to this interesting rolling debate, referred to the fact that I have in my constituency an electricity generating scheme in the form of a hydro-electric scheme. A number of miners also live in my constituency and there is an active opencast mine as well. In responding to the debate, I must view the matter from a wider base, and in the context of the national interest. We have covered a number of topics in the debate and I shall try to reply to as many points as I can.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) asked me about the purpose of the extra borrowing powers sought under the Bill, and mentioned in particular the development of nuclear power. Torness features largely in the borrowings of the SSEB, with an overall estimated cost of £1·8 billion. That venture was embarked on by the previous Labour Government and it is approaching fruition after a decade of successful construction. There are also other updating and improving activities, examples of which I gave the Committee in my opening remarks, to improve the transmission and distribution system within Scotland. The boards also have temporary borrowing needs, at the moment in the region of £140 million.
As to future needs, while we anticpate that borrowings will peak at around £2,760 million later this year, and thereafter will start to decline, future investments of substance may be contemplated. The hon. Member for East Lothian mentioned the interconnector, which at the moment has a capacity of 850 MW, equivalent to over 3 million tonnes of coalburn. There is considerable scope for improving the export of electricity south of the border if we can generate it competitively and strenghten the interconnector. We are keen to make progress in this sector, and it is an example of borrowings that may be required by the boards.
We have already debated the question of separate legislation. I repeat that there is much north and south of the border that is common, such as safety regulations, conditions of service, consent procedure and so on. When electricity was nationalised in 1947, the Labour Government thought that one Bill was sufficient to nationalise the electricity board for the whole country. We shall take a view on this matter and announce our proposals in due course.
The hon. Member for Garscadden asked me whether the views of the chairmen had been sought. We are interested in the views of the chairmen of both boards on

the structure of the industry and the contents of the Bill, but the question whether there will be one or two Bills is primarily a matter for the Government.
The hon. Members for Garscadden, for Edinburgh, Central (Mr. Darling), who told me that he would not be able to stay for the remainder of the debate, and for Glasgow, Cathcart (Mr. Maxton) asked about how the debt will be dealt with. The hon. Member for Garscadden further asked about the apportionment of debt between the south and north boards, but that is not a relevant consideration because each board has its own package of debt. The different sets of accounts for each board shows the debts clearly.

Mr. Maxton: There are to be some changes in the boundaries between the two boards which might mean a difference in assets on which there are debts outstanding. Does that not mean that there will be some changes in the present apportionment of debt? For example, if there is something outstanding on a power station, will the other board have to take it on?

Mr. Lang: That is a fair point. We made it clear in the White Paper that we would consider the possibility of the reallocation of assets and consumers. In that context, the structure of the companies, post-legislation, would come into the reckoning also. That matter is being investigated. It may be that the amount of reallocation that will be necessary will be limited. There may be other ways to handle such matters.

Mr. Dewar: The Minister is giving the impression that debt would accrue to the new privatised companies that replace the new boards. I had understood that a large portion of the debt was in connection with the nuclear capacity, so presumably that will accrue to the joint holding company. This is rather more complicated than the Minister seems to be suggesting, and there is also the question of the write-off effect and whether that has been ruled out.

Mr. Lang: I will come to the write-off later. If there were to be restructuring of the kind that the hon. Gentleman suggests, that would have to take account of matters other than just the generation of electricity, the boundaries of the boards and the consumers.
The hon. Member for Edinburgh, Central asked whether the debts of the electricity boards could be compared with those of the Rover Group. It is fair to point out that we are talking about debt entered into by two successful commercial ventures. Two thirds of the net current cost assets have been financed from internal resources. These are profitable companies. Currently, the north board is a net repayer of debt. As I have said, we anticipate that the combined debt of the two companies will peak fairly soon and start to decline. The south board's debt is being fully serviced and is being repaid or rolled over on a commercial basis. Indeed, 58 per cent. of the south board's debt has been incurred from overseas lenders on commercial terms.
The question of writing off debt is not as important as Opposition Members seem to think.

It being Seven o'clock, and there being private business set down by direction of THE CHAIRMAN OF WAYS AND MEANS under Standing Order No. 16 (Time for taking private business), further proceeding stood postponed.

Orders of the Day — North Killingholme Cargo Terminal Bill

Order read for resuming adjourned debate on Question—[22 June]—That the Bill be now read a Second time.

Question again proposed.

7 pm

Mr. Kevin Barron: I mentioned the question of coal movement in my constituency when, on the previous occasion, my hon. Friend the Member for Stretford (Mr. Lloyd) was talking about what is likely to happen in the North Killingholme area if coal is imported through the proposed port. In the villages of Dinnington and Thurcroft there has been intense movement of coal by lorries and, as a result, there has been a procession of people to my surgery and to local authority representatives' surgeries to try to get that stopped.
This coal traffic is a road safety hazard and wakes people up early in the morning. There is also the question of the substantial damage being done to the roads by the heavy lorries. That will involve the local authority in the cost of repairs and so on. I am sure that my hon. Friend the Member for Stretford will agree that the hon. Member for Brigg and Cleethorpes (Mr. Brown) should take the message back to his constituents that substantial movements of coal are not good for the local environment or its people.

Mr. Tony Lloyd: Since my hon. Friend began his intervention I have been able to go to sleep 12 times and travel back and forth between Manchester and here on two occasions. Surely that must make it one of the longest interventions in the history of Parliament.
I have also had an opportunity to visit the constituency of the hon. Member for Brigg and Cleethorpes (Mr. Brown), as I told him I would. I went to the funeral of one of my aunts who was a county councillor on Humberside county council for many years and who had also served on Lindsey county council. Her political contribution, unlike that of the hon. Member for Brigg and Cleethorpes, was geared to improving the north Lincolnshire and Humberside region. On the way to the funeral I took a detour through the port of Killingholme. I shudder when I think of the impact of the traffic on Myrtle villas or Westfield farm in his constituency, both of which are a long way from the A 180, which the hon. Gentleman told the House would be the only area affected. The roads to the port of Killingholme will be severely affected. As the hon. Gentleman knows, the roads are narrow and are not capable of taking the amount of coal that will travel by road. All the information that I have received shows that the coal will have to travel by road.

Mr. Joseph Ashton: Is my hon. Friend aware that a village called Blyth in my constituency, which used to win the title for the best kept village, has 1,100 heavy lorries thundering through it every day? Is he further aware that in many of the villages in my area, where there is to be a new power station, there are literally hundreds of lorries tearing up the roads where there are no pavements and no street lighting, and that as a result there will be horrendous costs for repair? Who will pay for the repair of the roads? Will it be the county council and the ratepayers of the hon. Member for Brigg and Cleethorpes (Mr. Brown)? It certainly will not be the people operating the ports. Will the people in the area have to pay more poll tax to cover the cost? Has the hon. Member for Brigg and

Cleethorpes taken that into consideration? Is he aware of the drop in property values because people do not want to buy a rural house, no matter how pretty it is, if 1,000 lorries pass it by every day and night, shaking it to its foundations?

Mr. Lloyd: My hon. Friend has made an important point. I cannot answer for the hon. Member for Brigg and Cleethorpes. As my hon. Friends will know, the hon. Gentleman's speech was short on answers and comments on the impact of the scheme. The answer to the question about who will pay for repairs to the roads is that it will be the poll tax payers in my hon. Friends' constituencies. A significant amount of the coal will travel by road.
In an intervention in my speech on the previous occasion the hon. Member for Brigg and Cleethorpes said that it was not long ago that 5 million tonnes of coal were being taken through the ports on the River Humber in his constituency. Since my hon. Friend the Member for Rother Valley began his intervention I have had time to find out what has changed since then. The hon. Gentleman omitted to tell the House that what has changed is British Rail's capacity to carry the coal. British Rail is not in a position to pick up the minimum 1 million tonnes of coal that would come through Killingholme initially. British Rail could not take up that capacity, unless it was on a permanent basis. For the coal mining communities it would be worse if it were on a permanent basis. At least initially the coal would come in on an experimental basis, to test the market, and in those circumstances the coal would not be carried by British Rail because it does not have the rolling stock to do so. That means that the coal would travel by road and, as my hon. Friends have said, it would travel through the coalfield villages and other villages, destroying the roads and the environment and making the lives of the residents in those areas significantly worse, at no cost to the promoters of the Bill.

Mr. Geoffrey Lofthouse: Is my hon. Friend aware of why British Rail does not have the rolling stock? It does not have the stock because it is inefficient. In my area it Is carrying coal from Selby coalfield, the major coalfield in the country, more than twice the distance that it needs to because it will not spend £2 million to provide a shorter route. It allows 150 coal trains to pass through the town of Nottingley every day, when they could travel half the distance. British Coal and the coalfields have to pay for that. British Rail will be doing that for 60 years and it could result in some of the pits becoming uneconomic.

Mr. Lloyd: My hon. Friend highlights the central point in the debate. I know that many of my hon. Friends want to make a contribution about the impact of the scheme on their communities. They want to talk about the social implications, the consequences of unemployment and so on.
My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) has criticised British Rail. British Rail's senior management should be criticised, but I should like him to join me in ensuring that some criticism is directed at the Government. There has been a poverty of planning in the way in which British Rail undertakes its operations. The Government should be criticised for the absence of any ports policy, the result of which we see in the Bill. We have seen no justification for the Bill on the grounds of the port capacity of Britain. We have seen no


justification in terms of a policy for energy requirements, because the Bill is irrelevant to the energy needs of the nation. We have seen no development of planning for road transportation, because it is obvious that neither the Minister nor the proposer of the Bill has any idea of how the coal will be carried when it is imported.
The Bill seeks to subvert the British economy. It will increase massively the imports of coal to Britain. It will destroy the jobs of those who work in the coalfields in Nottinghamshire and Yorkshire. That concern is shared by hon. Members on both sides of the House. It will put Britain in hock to the purveyors of apartheid. The hon. Member for Brigg and Cleethorpes is smiling, but at no point has he sought to distance himself from that view.
The House would be negligent if once again it went through the pretence that the Bill had received adequate consideration or that answers had been given to the searching questions that have been posed by my hon. Friends and myself. I hope that even at this late stage the hon. Member for Brigg and Cleethorpes will give answers to those questions or, preferably, withdraw the Bill.

Mr. Richard Alexander: In common with other hon. Members, I have sat through several hours of debate on the Bill. Most hon. Members present tonight are not friends of the Bill. My hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) has received no support from his hon. Friends. Even the Minister is neutral, or so he says.
I believe, like many of my hon. Friends, that if the Bill were passed it would harm the mining industry. I am sorry that much of the debate has been bedevilled by discussion of South Africa. The debate should be about not South Africa but what the Bill will do to the coal-mining industry of this country.
I accept that I am making a constituency and county point—I make no apology for that—but the Trent valley power stations provide a market for 70 per cent. of Nottinghamshire's deep-mined coal. Together with my hon. Friends, I am articulating a worry that has been expressed. As the Coalfields Communities Campaign points out to hon. Members in its briefing, British Coal has undertaken a significant and major programme of restructuring the industry in recent years. It has taken enormous strides to become competitive.
Those strides, which would be reversed if the Bill were passed, have been taken at some cost to the industry and its employees. At the end of the Scargill strike there were 169 pits in this country; there are now 96. Nottinghamshire has lost eight pits and 16,500 jobs. The industry is now concentrated on high-performance pits and coal faces. The human cost has largely been accepted by the mining industry's employees—certainly by the Union of Democratic Mineworkers—in the full knowledge that the industry is and was gearing itself to becoming competitive now and until the end of the century against world prices.
Today, international prices are low, yet no one pretends that they will continue to be. If by legislation the House makes it easier for foreign coal to enter this country, thus closing more pits before the industry is profitable, hon. Members will be doing grave harm to the industry.

Imports will certainly come, and they will be based not on real, long-term prices but on spot prices. As a result, British coal will be driven further into deficit, at a time when it is looking to balance its books. Its profitability and ability to compete with other fuels will be nil.

Mr. Martin Redmond: I beg to move, That Strangers do withdraw.

Notice being taken that Strangers were present, MR. DEPUTY SPEAKER, pursuant to Standing Order No. 143 (Withdrawal of Strangers from the House), put forthwith the Question, That Strangers do withdrawn:—

The House divided:Ayes 24, Noes 168.

Division No. 393]
[7.14 pm


AYES


Ashton, Joe
Morris, Rt Hon A. (W'shawe)


Barnes, Harry (Derbyshire NE)
Oakes, Rt Hon Gordon


Buckley, George J
O'Brien, William


Dalyell, Tam
Patchett, Terry


Eadie, Alexander
Redmond, Martin


Flynn, Paul
Richardson, Jo


Grocott, Bruce
Salmond, Alex


Hinchliffe, David
Skinner, Dennis


Illsley, Eric
Welsh, Michael (Doncaster N)


Jones, leuan (Ynys Môn)
Wise, Mrs Audrey


Lofthouse, Geoffrey



McKay, Allen (Barnsley West)
Tellers for the Ayes:


Mahon, Mrs Alice
Mr. Frank Haynes and Mrs. Llin Golding.


Meale, Alan





NOES


Adley, Robert
Favell, Tony


Alexander, Richard
Fearn, Ronald


Allen, Graham
Forth, Eric


Arbuthnot, James
Fox, Sir Marcus


Arnold, Jacques (Gravesham)
French, Douglas


Ashby, David
Gale, Roger


Atkins, Robert
Gill, Christopher


Atkinson, David
Goodhart, Sir Philip


Bennett, A. F. (D'nt'n &amp; R'dish)
Goodson-Wickes, Dr Charles


Bennett, Nicholas (Pembroke)
Gorman, Mrs Teresa


Benyon, W.
Gorst, John


Biggs-Davison, Sir John
Gow, Ian


Blackburn, Dr John G.
Grant, Sir Anthony (CambsSW)


Boswell, Tim
Greenway, John (Ryedale)


Bottomley, Peter
Ground, Patrick


Bowis, John
Hanley, Jeremy


Boyes, Roland
Harris, David


Braine, Rt Hon Sir Bernard
Hayhoe, Rt Hon Sir Barney


Brandon-Bravo, Martin
Higgins, Rt Hon Terence L.


Brown, Michael (Brigg &amp; Cl't's)
Hogg, N. (C'nauld &amp; Kilsyth)


Bruce, Ian (Dorset South)
Howarth, Alan (Strat'd-on-A)


Budgen, Nicholas
Hughes, John (Coventry NE)


Burns, Simon
Hunt, David (Wirral W)


Butler, Chris
Irvine, Michael


Butterfill, John
Jack, Michael


Campbell, Menzies (Fife NE)
Janman, Tim


Campbell-Savours, D. N.
Jessel, Toby


Chapman, Sydney
Jopling, Rt Hon Michael


Chope, Christopher
Kirkhope, Timothy


Clark, Dr Michael (Rochford)
Knapman, Roger


Clark, Sir W. (Croydon S)
Knight, Greg (Derby North)


Conway, Derek
Lang, Ian


Cope, Rt Hon John
Latham, Michael


Corbyn, Jeremy
Lawrence, Ivan


Couchman, James
Lennox-Boyd, Hon Mark


Currie, Mrs Edwina
Lester, Jim (Broxtowe)


Davies, Q. (Stamf'd &amp; Spald'g)
Lightbown, David


Davis, David (Boothferry)
Lilley, Peter


Devlin, Tim
Livingstone, Ken


Dixon, Don
Lloyd, Peter (Fareham)


Dorrell, Stephen
Lyell, Sir Nicholas


Douglas-Hamilton, Lord James
Maclean, David


Dunn, Bob
McLoughlin, Patrick


Emery, Sir Peter
McNair-Wilson, Sir Michael


Evans, John (St Helens N)
Madden, Max


Fallon, Michael
Major, Rt Hon John






Malins, Humfrey
Shaw, Sir Giles (Pudsey)


Mans, Keith
Shephard, Mrs G. (Norfolk SW)


Marshall, Michael (Arundel)
Shepherd, Colin (Hereford)


Martin, David (Portsmouth S)
Shersby, Michael


Mates, Michael
Skeet, Sir Trevor


Michie, Bill (Sheffield Heeley)
Smith, Andrew (Oxford E)


Michie, Mrs Ray (Arg'l &amp; Bute)
Smith, Tim (Beaconsfield)


Miller, Sir Hal
Speed, Keith


Mitchell, Andrew (Gedling)
Spicer, Michael (S Worcs)


Mitchell, David (Hants NW)
Stanbrook, Ivor


Moate, Roger
Steen, Anthony


Montgomery, Sir Fergus
Stewart, Allan (Eastwood)


Moonie, Dr Lewis
Stewart, Andy (Sherwood)


Morris, M (N'hampton S)
Stradling Thomas, Sir John


Moss, Malcolm
Summerson, Hugo


Moynihan, Hon Colin
Taylor, Ian (Esher)


Neale, Gerrard
Taylor, John M (Solihull)


Nelson, Anthony
Taylor, Matthew (Truro)


Neubert, Michael
Taylor, Teddy (S'end E)


Newton, Rt Hon Tony
Temple-Morris, Peter


Nicholls, Patrick
Thompson, Patrick (Norwich N)


Onslow, Rt Hon Cranley
Thurnham, Peter


Page, Richard
Tracey, Richard


Pattie, Rt Hon Sir Geoffrey
Wakeham, Rt Hon John


Peacock, Mrs Elizabeth
Walden, George


Pendry, Tom
Walker, Bill (T'side North)


Porter, David (Waveney)
Wall, Pat


Portillo, Michael
Watts, John


Powell, Ray (Ogmore)
Wheeler, John


Price, Sir David
Widdecombe, Ann


Raison, Rt Hon Timothy
Wiggin, Jerry


Redwood, John
Wilkinson, John


Renton, Tim
Wilshire, David


Rhodes James, Robert
Winterton, Mrs Ann


Riddick, Graham
Wood, Timothy


Roe, Mrs Marion
Young, Sir George (Acton)


Rogers, Allan



Rossi, Sir Hugh
Tellers for the Noes:


Sayeed, Jonathan
Mr. Richard Ryder and


Shaw, David (Dover)
Mr. Kenneth Carlisle.

Question accordingly negatived.

Mr. Dennis Skinner: On a point of order, Mr. Deputy Speaker. On other occasions, most hon. Members have voted not to exclude Strangers from the Gallery. You will have noted that in this Division a few of my hon. Friends decided to vote for the exclusion. They wish to place on record their worry not about those in the Strangers' Gallery—I am not supposed to refer to that—but about the promoters of the Bill who are sitting in the Under Gallery. I hope that the press understands that those who called the Division did so to exclude those representing South Africa and the coal importers.

Mr. Deputy Speaker (Sir Paul Dean): The hon. Gentleman has put his point on record, but it is not in order for him to refer either to the Strangers' Gallery or to the Under Gallery.

Mr. Alexander: Before I was unnecessarily interrupted, I was trying to draw to the attention of the House the effect that the Bill would have on the future profitability of the coal industry and the viability of coal as against other fuels. I was about to suggest that the results of a further large-scale contraction in the industry would be permanent. In those circumstances, it would not be possible to resume the current march towards profitability in our coalfields.
A pit that closes stays closed. It would be far too expensive ever to reopen a pit that closed, even if the closure was originally thought to be on a temporary basis—until it proved possible to sell coal at a higher price. One

cannot simply mothball a coal mine as one can parts of many other industries. Therefore, the Bill has very serious implications.
Some of my hon. Friends might say that the industry should be completely governed by market forces. They might say, "If foreigners come in and dump coal and destroy our markets, so what?" I hope that none of my hon. Friends will take that view; it is a very simplistic view of the market economy. I do not take that view and neither do the electors of Nottinghamshire, especially members a the Union of Democratic Mineworkers, who would certainly not expect Conservative Members representing Nottinghamshire to adopt that line. We are here to protect those who sent us here. If we do not stand up and look after them, we should be doing a different job elsewhere.
The issue is wider than protecting the industry and our constituents' jobs. If we destroy our coal industry, as I believe the Bill will, we will put the cost of electricity and possibly even its supply in the hands of our competitors abroad. They could do that with the benefit of our destroyed coal industry. From the day we pass the Bill, the cost of our energy could well be in the hands of others.
Those who supply cheap coal will not continue to supply it cheaply once our industry has been destroyed. Why should they when they have destroyed our market? We would be totally in their hands as to cost. There may be an added cost which we would be unable to control—the cost of paying seamen and dockers to handle imported coal.

Mr. Terry Patchett: Is the hon. Gentleman aware that I have heard this speech before, but that it previously came from. Arthur Scargill before the 1984 strike? What has changed the hon. Gentleman's attitude? Is he playing up to the Union of Democratic Mineworkers and forgetting the warnings that were given?

Mr. Alexander: I am sure that Mr. Scargill speaks common sense from time to time. If he shares my view, I believe that he speaks common sense.
I should like to underline the fact that we are proposing to risk this damage just when British Coal feels ready to take on the world. On 13 June, British Coal's chairman said:
The nation's coal reserves are a great asset, and we have in sight a viable and competitive coal industry. I believe we arc through the worst and poised on the brink of success. To sum up, we have an excellent opportunity to turn British Coal from a long-term national liability into a successful business and national asset.
I share his view and believe that the chairman would be hostile to the Bill as presently drafted.
Our reserves are a national asset and we should protect them. We should not be making it easier for our competitors to come in and ruin our market. No other country in the world would do that. If we allow the Bill to pass, we shall be allowing our competitors to come in and take advantage of the short term—of the current spot market rate. We should look after our mining industry. In my view, the Bill will not do that.

Mr. Alan Meale: I found parts of the speech of the hon. Member for Newark (Mr. Alexander) quite interesting. I have a feeling that some of his hon. Friends do not agree with him—they are not in the Chamber. All Labour Members who represent


Nottinghamshire are here, as are those from Yorkshire and elsewhere. I hope that, with this Bill, we do not have a repeat of what happened with previous legislation, when 115 Conservative Members walked through the Lobby to agree to legislation which had a similar effect.

Mr. Patrick McLoughlin: rose——

Mr. Meale: I shall not give way now.
I am grateful for this opportunity to speak as the Bill is important to Nottinghamshire and to my constituency. It is unfortunate and inappropriate that the method being used to introduce it and other Bills associated with it is described as the private Bill procedure. They should be described as commerical Bills—that is surely their prime objective.
On this and other related matters, the House has often heard the pleas of hon. Members who oppose the blatant misuse of parliamentary procedures to push commercial interest legislation such as this on to the statute book. The House should not fool itself into believing that the main aim of this Bill is anything other than private gain set against the undoubted effects on the nation as a whole.
Because of those effects, we should also consider whether it is in the interests of the public to allow the Bill to proceed. Is the Bill's purpose to aid the importation of cheap, foreign coal for a privatised electricity industry? Is its purpose to aid British Coal's pit closure programme? Is it simply the free market strategy pursued by the Government taken to its wildest extremes? Not surprisingly, I believe that the answer is a combination of all three, and that it is motivated by the desire for profit which is set against the needs of the nation.
If the Billl and others associated with it are approved, they will have a devastating effect on Britain's remaining mining communities. Pits will close in all coalfields, particularly because of the importation of cheap foreign coal, mainly from South Africa and Colombia, where it is dug by child labour or miners on such low wages that every other civilised nation in the world condemns its purchase.
I must tell the hon. Member for Newark that we cannot disregard what is happening in the mining industry in South Africa. Children are being used to dig coal and miners are dying underground because of appalling conditions. Appallingly low wages are paid to workers.

Mr. Allen McKay: That is an important point. Is my hon. Friend aware that, 150 years ago today, Husker pit in my constituency lost 26 children aged between seven and 11? That is what is happening in South Africa today.

Mr. Meale: I am grateful for that intervention.
The facts and figures are clear. If the Bill and others associated with it go through, coalfields in Yorkshire, the midlands and Nottinghamshire will be affected. They currently supply 65 million tonnes to the market, 50 million tonnes of which go directly to power stations. In Nottinghamshire, building facilities such as is proposed will mean that at least 13 of the remaining 18 pits in the county will be at risk as most of their product goes to power stations. I should like to give the figures for the pits in Nottinghamshire. At Blidworth colliery, 51 per cent. of output goes directly to power stations; at Calverton, 80 per cent.; at 011erton, 87 per cent.; at Thoresby, 93 per cent.;

at Creswell, 95 per cent.; at Harworth, 97 per cent.; at Bilsthorpe, 98 per cent.; at Silver Hill, 98 per cent.; and at Bevercotes, Cotgrave, Sherwood, Welbeck and Clipstone, 100 per cent. Building facilities such as those proposed would put directly at risk at least 12,000 miners' jobs in the county. In Yorkshire, 16 pits would be threatened; in the midlands and Derbyshire, five out of the nine remaining pits might close. Up to 37,000 jobs would be directly at risk in those areas alone.

Mr. Ashton: Has my hon. Friend seen the report of the Unemployment Unit that was sent to hon. Members last week listing a new jobs table for 633 constituencies in England, Wales and Scotland? Does he realise that during the past 12 months his constituency was number 627 and mine was number 621? Even the constituency of the hon. Member for Sherwood (Mr. Stewart) was number 586. Those areas are in dire straits even before the importation of coal—let alone after these port facilities are built.

Mr. Meale: In addition to the jobs lost directly, the indirect effect will mean a total job loss well into six figures in those communities. I am grateful to my hon. Friend for pointing out that both of the remaining pits in my constituency would be at risk. Eight others in a 12-mile radius would be similarly threatened. There are already more than 38,000 unemployed in that geographical area. The Government's recent refusal to support the coal industry has led to the closure of Mansfield colliery in my constituency, with a loss of more than 1,000 jobs. I am pleased to note that my hon. Friends have expressed their sorrow about that, while Conservative Members have had little or nothing to say.
The Bill would have devastating effects on my constituents and others in the area. We may ask what the benefits could be of such measures, apart from fat profits for its backers and promoters. It would jeopardise Britain's ability to be self-sufficient in coal; it would lead to mass unemployment in mining communities; and it would allow artificially priced coal to increase prices when the opportunity arose.

Mr. Michael Welsh: If those pits are closed because of the proposed port facilities, the remaining pits will have to pay for and carry all investment costs. Therefore, unit costs will rise in the remaining pits, causing them to suffer. Is it not possible that our coal industry will cease to exist and we will depend completely on foreign coal?

Mr. Meale: I agree with my hon. Friend's analysis. This Bill, coupled with the appalling management of British Coal, would probably ensure that fate for it. It would also set Britain apart from most other civilised nations, which refuse to allow the use of cheap, slave labour, blood coal imported from South Africa and Colombia.
It has been established that the Humber ports, in particular, would be used to import bulk South African coal to our power stations. That was proved by the recent visit of four representatives from major South African mining corporations to try to arrange long-term contracts for their businesses. The Dutch company Van Ommeren is part of the company that will run the terminal. It is the second largest Dutch coal importing company. According to the Dutch central statistics bureau, last year it imported about 5·8 million tonnes of South African coal—4·3 million tonnes were shipped on to other countries, of


which 2·9 million tonnes were transhipped from Dutch ports to the United Kingdom. The signs are that the figures will increase this year and that South African coal will be piled up not only in Holland, but in such places as Ghent and Rotterdam.

Mr. Lofthouse: Does my hon. Friend agree that, apart from a loss in national resources, the Bill could result in the loss of 50,000 miners jobs, plus 26,000 spin-off jobs? That will cost the nation more than £500 million in unemployment pay, redundancy and so on. Could not that money be better spent by British Coal than by competing with coal from abroad mined by slave labour?

Mr. Meale: I agree with my hon. Friend. However, the figures I gave earlier showed that the situation could be even worse than that.

Mr. Tony Lloyd: My hon. Friend will recall that the week before last I pressed the hon. Member for Brigg and Cleethorpes (Mr. Brown) about the role of Van Ommeren, and the hon. Gentleman either feigned surprise or genuinely did not know the answer. Will my hon. Friend press the hon. Gentleman again about the role of Van Ommeren and ask him to come clean with the House?

Mr. Meale: I am happy to ask the hon. Member for Brigg and Cleethorpes (Mr. Brown) to disclose his links with Van Ommeren, whether through meetings or other contacts. For example, I should like to know whether those persons who are not actually in the Chamber but to whom he spoke earlier are either part and parcel of that company or have links with it. The hon. Gentleman will have an opportunity to come clean and admit that his trip to South Africa was not merely to study the tourist industry—or, indeed, to eat the Outspan oranges that he undoubtedly liked—but was linked with the commercial private companies that wish to set up Britain for private gain, using the Killingholme terminal.
Many hon. Members on both sides of the House want to speak against the Bill. I have yet to hear of anybody who wishes to speak in favour of it, apart from its sponsor. I take pride in urging hon. Members to vote against the Bill for the sake of Britain generally, but especially of Nottinghamshire, and of South African and Colombian miners.

Mr. Martin M. Brandon-Bravo: On the surface, this is round two in a debate on another Immingham dock. In practice, of course, it is really round four, because the Bill that was given a Second Reading last week provoked contentious arguments for and against another dock at Immingham. That Bill included two other docks, one in south Wales and another in Kings Lynn, but they were not objected to by hon. Members on either side of the House. Conservative Members who voted for those two ports may regret that because they will be tied to the inevitable delaying tactics in Committee and at later stages about the contentious issue of the Immingham dock. This Bill concerns the single dock at Immingham, so there are no issues to sidetrack us.
Sadly, I feel that the Second Reading last week has caused some Conservative Members to think that because of last week we are trying to close the stable door after the

horse has bolted. Perhaps that is true, but I believe that the arguments should be made and I wish to put them on record.
On commercial and industrial matters I am normally what is described as "dry". Therefore, on this particular issue, I admit to being on unfamiliar and perhaps uncomfortable ground. Normally it is not my wont to argue against matters that are better dealt with in purely commercial and industrial terms, but I have looked at this issue in commercial, industrial and human terms and I wish to oppose the Bill. A number of my colleagues will join me. We shall oppose it not just for narrow constituency reasons, but because we believe that the whole region will be adversely affected by it.
The two pits that used to be inside the city boundaries of my constituency closed 20 years ago, and I doubt whether there are 100 miners, if that, in my constituency. Nevertheless, wider issues must be considered. The hon. Member for Mansfield (Mr. Meale) has sought to disparage Conservative Members' comments on this matter. Other Labour Members have sought to suggest that, in some way, Conservative Members have been acting out a charade. As this is probably a time-limited debate, I speak for all my colleagues in and around Nottinghamshire and Derbyshire. They feel strongly about this matter. When they voted last week against Second Reading of the Associated British Ports (No. 2) Bill, they were not seeking phoney publicity.

Mr. Meale: I am pleased that the hon. Gentleman has said that. It is true that the other associated Bill to this was given a Second Reading last week and that in Nottinghamshire a lot of publicity followed that decision. The reason why the Bill was given a Second Reading last week was not the failure of any one Labour Member, but the number of Government supporters who marched through the Lobby in support of it.

Hon. Members: The payroll vote.

Mr. Brandon-Bravo: The real reason is that the Labour party could not organise a digestive explosion in a storm. Last week, at 7 o'clock, there were more than 100 Labour Members present. By half past eight, when the vote on the Bill was taken, it suited Labour Members, having made all the noise and the shouting about South Africa and the miners, to go home. All that was necessary was for 100 Labour Members to remain at half past eight and, together with Conservative Members, the Bill would have been defeated—[Interruption.] Any honest study of the vote that night would show that few members of the Government voted.

Mr. Deputy Speaker: Order. Now that hon. Members on both sides of the House have got that off their chest, let us return to discussing the Bill.

Mr. Brandon-Bravo: I agree. I am seeking to oppose the Bill on two grounds.

Mr. Allen McKay: The hon. Gentleman is deceiving the House.

Mr. Bradon-Bravo: Would the hon. Gentleman like to say that on his feet?

Mr. McKay: The hon. Gentleman knows about the figures. If he compares the number of absent Labour Members with the number of absent Conservative


Members, he will find that one cancels out the other. If he looks at the Division list in Hansard, he will see those who voted from the Government Front Bench range from a Secretary of State to the Chief Whip, the Deputy Chief Whip——

Mr. Deputy Speaker: Order. We cannot hark back to debates of many days ago.

Mr. Brandon-Bravo: I am grateful to you, Mr. Deputy Speaker, but Labour Members are trying to make a silk purse out of a sow's ear. They know that they were not here, and that is the bottom line.
I have two reasons for opposing the Bill. The first reason may be described as an emotional one—it is a sense of debt. I do not believe that I am going over the top if I say that some Conservative Members——

Mr. Meale: Are in debt.

Mr. Brandon-Bravo: Some Conservative Members feel that they have a debt of honour. [Laughter.] Apparently that causes great amusement on the Labour Benches, but that surprises no one.
My second and main reason for opposing the Bill is on straightforward, longer-term economic grounds. No one on either side of the House could say that, on economic grounds, the creation of the port—the one that was voted for last week—will not have a major economic effect on the east midlands. No one needs reminding of the events of March 1984 to May 1985.

Mr. Redmond: The Bill will have a devastating impact on the east midlands coal industry, but it will also have a tremendous impact throughout the country. The hon. Gentleman and his hon. Friends talk about the need to be self-sufficient and to protect the balance of payments, but they continue to support the Government's attacks on the coal industry. What they should do is work jointly with British Coal, the unions and the Government to give the industry and the country the future that it desperately needs.

Mr. Brandon-Bravo: I have never heard such rubbish in my life. If the hon. Member for Don Valley (Mr. Redmond) is seeking to suggest that his country could have gone on defending, via massive wasteful subsidies, the type of coal industry that we had eight years ago, he is living in cloud-cuckoo-land. We set out to create a viable coal industry, one that did not need massive support. We now have a splendid coal industry and the Government are now seeking to give it a fair chance to make it right through to the next century. That is a different story from the one that the hon. Gentleman was seeking to put to me.

Mr. Andy Stewart: Is my hon. Friend aware that, since the end of the disastrous strike, productivity has increased by 60 per cent. due to the skilful negotiations of the Union of Democratic Mineworkers. whose negotiated conditions were subsequently imposed on the other people who work in the industry? Does my hon. Friend agree that that is the way forward?

Mr. Brandon-Bravo: My hon. Friend is absolutely right. It is a great pity that the written word in Hansard never quite conveys the feelings of the House. What was apparent last week, and is apparent tonight, is the

animosity that is still felt on the Labour Benches for the 30,000 Nottinghamshire miners and their families who said no to the concept of Scargillism. That is what the debate should be about.

Mr. Redmond: On a point of order, Mr. Deputy Speaker. It is not my intention to prolong the hon. Gentleman's line of argument, but I suggested that the British Coal board, the Government and the unions should get together for the good of the country.

Mr. Brandon-Bravo: I am not certain whether that was a point of order or a question to me.
I repeat that a number of my Conservative colleagues recognise the debt that they owe to the 30,000 Nottinghamshire and east midlands miners. They had no great love for the Conservative party and they probably still do not, but that does not take away from the fact that my hon. Friends and I believe that we owe a debt to those miners and their families for what they did three years ago and for what they have done since. We would like them to continue their success in the next 10 to 20 years. They probably will not thank us for it, but it should be put on the record. That is what I meant when I said that we owe a debt of honour.
There is an economic base for our opposition to the Bill, and in support I should like to quote from the former Secretary of State for Energy, who was asked at the 1984 Conservative party conference why we do not import cheap coal. He said:
We could import a lot of cheap coal at certain times. That would undermine our industry and we could lose all of our pits. Then we would become very dependent upon that imported cheap coal—and when we did so it would no longer be cheap. That would mean enormous economic and social disruption. We have not done that. Nor have we rushed into closing pits the moment they have become uneconomic. If new investment and machinery could make a pit economic, we have put in that new investment and machinery. We have done it in a way showing that the community's problems are understood. We will follow a sane policy towards the coal industry.
My right hon. Friend closed his speech by saying:
To the miners we say this. We promise you a future better than the past, a future of high investment in your industry, a future of better pits, better machinery and better conditions, an expanding future in which, as the industry becomes more profitable and prosperous your pay packets will reflect that new prosperity. We promise your communities a programme which will help their future so that the sons and daughters of miners where pits now close have a better future than their fathers had in the past.
My right hon. Friend is still a member of the Cabinet and, to the best of my knowledge, that philosophy and policy have not changed.

Mr. McLoughlin: Is my hon. Friend aware of the words of my right hon. Friend the Prime Minister during that same conference? She said that the bravery of the thousands of miners who went to work during the dispute had kept the coal industry alive and that not only the nation but the miners who went on strike and whose jobs were saved by the UDM members owed them a great debt? They also enabled British Coal to continue to supply its customers.

Mr. Deputy Speaker: Order. I remind the House that we are not debating the coal industry. But the coal industry is relevant to the Bill and references to it in the context of the Bill are in order.

Mr. Brandon-Bravo: My hon. Friend is absolutely right. Those words of the Prime Ministers and of the former Secretary of State for Energy are evidence that the Government deliver what they promise, and the screams and shouts from the Opposition no longer hold water.
My right hon. Friend the former Secretary of State did not promise that there would never be exposure to free and fair competition. Nor would I argue that the coal industry should never be exposed to such competition because by that means we can judge its efficiency.

Mr. Pat Wall: The hon. Gentleman talks about fair competition and economic arguments. I repeat the question that I asked previously. Is it not true that we already have an overcapacity in docks? The argument is that this port will bring work for dockers, but in fact it will take work from other ports and not increase the number of jobs for dockers and other people connected with that industry. That is the first point.

Mr. Deputy Speaker: Order. Interventions must be brief.

Mr. Wall: I take your point, Mr. Deputy Speaker. Is it not a fact that continental ports are subsidised in relation to their infrastructure and dredging, and that they work to a plan under which shipping is directed to different ports? In Britain the matter is completely open and a dock never knows when it will get a contract. To get fair competition with continental ports, would we not have to introduce such planning? If we do not, this new port will be entirely unnecessary.

Mr. Brandon-Bravo: The hon. Gentleman has made two fairly valid points. If we create a dock here or a new factory there, we may be simply taking work away from somewhere else. We may gain 100 jobs there, but lose 50 elsewhere. That is not in dispute, but our case against this dock is not along those lines. We oppose it because of the risk to the pits in the east midlands and the line of power stations along the Trent valley, not because it will take dockers from other ports. I go along with the hon. Gentleman's point about fair competition. I have spent 35 years in commerce and industry, and I have never known a time when there was strictly free and fair competition. Industrial life is more of a "rough-and-tumble," and I use the phrase in inverted commas, not in the absolute sense.
The argument for importing coal is that it would be cheaper. I recognise that fuel represents almost half the cost of producing electricity and that if we could halve the cost of fuel, in theory, the price of electricity would be reduced by 25 per cent. That is attractive to commerce and industry and it would be extremely interesting to an employer like me. If that cheap fuel—in this case, coal—is unfairly dumped on the British market, we shall have cheap electricity for as long as the cheap coal comes in, but we must ask: for how long? If we build up a stock during the next few years, we may benefit from lower coal prices while our pits are still alive, but, as my hon. Friend the Member for Newark (Mr. Alexander) said, once our pits are closed or their output gets so small as to make no difference, the price of the imported coal will increase.

Mr. Jim Lester: Is it not interesting that, although some companies are prepared to sign long-term contracts for the supply of imported coal, they are not prepared to sign long-term contracts for the price of that coal? The price has to be re-negotiated every year, so it will

not be as long as my hon. Friend suggests before price3 return to the production costs which they are now well below.

Mr. Brandon-Bravo: That is a valid point. All the cheap coal is either spot coal, as my hon. Friend the Member for Newark pointed out, or bought one year at a time, as my hon. Friend the Member for Broxtowe (Mr. Lester) said. Electricity boards must have long-term stability and know what price they will have to pay. We are saying that the early construction of this terminal could be terminal for Nottinghamshire.
There are some interesting figures about British Coal's contributions to industry in Nottinghamshire. It is estimated, for example, that about £300 million is paid in wages and salaries, about £5·6 million in rate contributions, and about £130 million is added to purchasing power in and around our area. Conservative Members do not want to put that at risk. The dock does just that; and that is why we are arguing against it.
No one can doubt the strides that British Coal has made these past three years. The improvement in productivity has been nothing short of astonishing. It could be argued that the natural changes and improvements that should have taken place were blocked, first, by the oil crisis of 1973 and then by the first coal strike in 1974. From then on the union was appeased and a blind eye was turned to good management practices. The only thing that British Coal could do was to try to improve matters by capital spending. In a way, capital spending became a substitute for management and normal commercial decisions.
The board has a fine record these past three years. All we are asking is that hon. Members on both sides of the House should give the board the time it needs to ensure that it can compete in "free and fair competition" with the rest of the world, once normality has returned to world coal.
In discussion of world coal and subsidised prices, in this debate and the three previous ones, there has been constant harping on South African coal, as if we were debating apartheid by means of the Immingham terminal. Nothing could be further from the truth. It is a pity that the hon. Member for Mansfield has left the Chamber. At least he did us the courtesy of mentioning Colombia. My hon. Friend the Member for Broxtowe mentioned it last week. I understand that Colombia has opencast mining, which is quite different—although I understand that all sorts of oddities are associated with that country's production. Australia also has mostly opencast coal, so let us not fool ourselves into thinking that we are arguing only about South African coal. The Colombians, Australians and even the Chinese have been trying to export coal for the Western hard currency that it can bring them. I agree with the hon. Member for Bradford, North (Mr. Wall.) that this is not free and fair competition. We want enough delay in the construction of the terminal—if it is ever to be built-for British Coal to be able to get its act together.
Finally, I want to quote Sir Robert Haslam's address to the UDM conference. He said:
National productivity records have been broken four times in the opening seven weeks of 1988–9.
He also spoke of the records that were established by the Nottinghamshire coalfield in the early part of this year. Then it was announced—I think on the day of our debate last week—that the Nottinghamshire pits had, for the first


time, passed the five tonnes per man-shift barrier. [Interruption.] The people who tried to kill off the Nottinghamshire miners were on the Opposition side and the Nottinghamshire miners know that.
Sir Robert said:
National productivity is currently 16 per cent. higher than a year ago".
He added that productivity is 60 per cent. up over the past three years.
Sir Robert also made a point that concerns Leicestershire miners. He referred to the new mine at Asfordby, to which many people in Leicestershire and Nottinghamshire were looking for their future:
At present exchange rates it is difficult to justify going ahead with this project. But the Corporation are planning to do so as an act of faith".
Sir Robert Haslam is prepared to make that act of faith—

Mr. Deputy Speaker: Order. I interrupt the hon. Gentleman again because he is again debating the coal industry. He must link his remarks to the Bill.

Mr. Ashton: On a point of order, Mr. Deputy Speaker. This is a three-hour debate and the hon. Member for Nottingham, South (Mr. Brando-Bravo) has gone on for almost half an hour in a partisan speech. May we have a 10-minute rule so that other hon. Members will be allowed to reply, or will the closure be moved when we have had only a one-sided contribution from the hon. Gentleman?

Mr. McLoughlin: Further to that point of order, Mr. Deputy Speaker. It ill becomes the hon. Member for Bassetlaw (Mr. Ashton) to complain about the length of speeches. If he had read the previous debates on this subject, he would have seen that many of his hon. Friends spoke for 40 or 50 minutes and prevented Conservative Members from speaking.

Mr. Deputy Speaker: At the moment the Chair has no power to impose a 10-minute limit on speeches, but the hon. Member for Bassetlaw (Mr. Ashton) has given me the opportunity to say that many hon. Members wish to take part in the debate. I hope that those who are called will bear that in mind.

Mr. Brandon-Bravo: I apologise if I have been longer that I intended to be, but the record will show how many times I have given way. If I had not, I doubt whether that criticism would have been made of me. It is also true to say that last week a colleague of the hon. Member for Bassetlaw (Mr. Ashton) spoke for one hour and 20 minutes, so his point of order was grossly unfair.
You are right, Mr. Deputy Speaker, to say that we are not debating the coal industry, but we are debating another terminal at Immingham, which is seen by hon. Members on both sides as providing a means for cheap, subsidised coal to enter the country. It is on that basis alone that we seek to oppose it.

Mr. Eric Illsley: My hon. Friend the Member for Doncaster, North (Mr. Welsh) informed the House that he had failed to identify the sponsors of the Bill as it is drafted. I believe that the hon. Member for Brigg and Cleethorpes (Mr. Brown) should withdraw the Bill or

suspend proceedings on it until it is so drafted that all hon. Members can identify which organisations or companies are promoting it.
My hon. Friend the Member for Mansfield (Mr. Meale) referred to a company called Van Ommeren, which is not even mentioned in the Bill. That makes one wonder which company is involved, as the parent company listed in the Bill, Chemical and Oil Storage Management Ltd., cannot be identified.
The Bill is designed to enable considerable work to be carried out on a cargo terminal, which will increase imports of various cargoes, but most of all of cheap foreign coal. It is a sad fact that some Conservative Members support a private company in order to make profit out of imports, even after the horrendous balance of payments figures that were announced recently. As we have heard from every speaker so far, these imports will lead to a loss of jobs in our industries.
One of the main factors behind the Bill is the import of cheap South African coal, mined by exploited labour in South Africa at a time when public opinion is turning against the South African regime, as we have seen recently, with concerts opposing the apartheid regime. Even now a march is taking place in this country, which will end with a mass rally in London, calling for the release of Nelson Mandela. We all noted that in the Daily Mail on 6 April this year the promoter of the Bill, the hon. Member for Brigg and Cleethorpes, was referred to as having invited representatives of the South African coal industry to this country. It is obvious from that that South African interests will be paramount if the Bill is passed. The hon. Member for Nottingham, South (Mr. Brandon-Bravo) mentioned how hon. Members were trying to support the coal industry, but it makes a mockery of that and of ideas of buying British or supporting British industry when we see the hon. Member for Brigg and Cleethorpes promoting South African interests.
As I said earlier, the terminal is for imports as opposed to exports. Our balance of payments figures show that our exports are not doing well. Recent figures for imports and exports through the ports on the Humber show that in 1987 imports were exactly double exports. In that year there were about 20 million tonnes of imports, compared with 10.5 million tonnes of exports. Therefore, the idea that the Bill will facilitate any exports through the Humber is a fallacy.
It is appropriate to consider the contents of the Bill in detail, in view of the considerable number of powers under it, together with special powers to give directions and make byelaws. The powers are wide-ranging. I feel that it is an abuse of the House that we are asked to bestow those powers on a private company, as opposed to an authority that will be accountable.

Mr. Redmond: My hon. Friend is making a valid point. It is correct that people are using the House as a backdoor method of promoting private interests. One would hope that the Examiners will take that into consideration and bring some semblance of order and justice to this place.

Mr. Illsley: I agree with my hon. Friend. The Examiners could take the Bill as an example of that abuse. I hope that they will consider that in their deliberations.
As I mentioned, the Bill gives powers to make byelaws and special directions to an unelected and unrepresentative body, a private company that will have absolute power


over the terminal area. Those powers include the power for the Central Oil Refining Company Limited—we cannot identify it; we have been told that perhaps it is now a subsidiary of another company, Simon Engineering plc—to become a public harbour undertaking. That is interesting. If we are to believe the Bill, that company has direct commercial interests in oil and it will become the controlling authority for the terminal. It remains to be seen whether, in the circumstances, the House should let this private company become a harbour authority. The company might abuse its position in the use of those facilities and of the powers that will be granted under the Bill.
The parent company is listed as Chemical and Oil Storage Management Ltd., although we are not sure whether it is still in existence, or even still connected with the Bill. Obviously the company has chemical and oil interests at heart. I shall refer to some of the powers in the Bill that could affect adversely the communities in and around Killingholme.
If the terminal is to be built and expanded, there should be adequate controls, and the byelaws and powers granted under the Bill should be in the hands of an authority that is accountable and representative, not in the hands of a private commercial interest. The Bill states:
It is expedient that the other powers contained in this Act should be conferred on the company.
Expedient to whom? Why should it be expedient that the powers in the Bill are conferred on the company? We have heard fronm Conversative Members that the Bill will not do any favours for Nottinghamshire or Leicestershire, and Opposition Members have said that it will do nothing for south Yorkshire or Nottinghamshire. It will certainly not be to the benefit of miners or others whose jobs are affected.
There are wide powers in the Bill to improve, maintain, regulate, manage, construct, alter, demolish and reconstruct. There is every conceivable power that the private company would need to enable it to carry out whatever function it likes and ride roughshod over the community, which will have no right of redress against the private company, because it will be unaccountable to anyone other than the shareholders.
One must ask why the Bill has been brought forward in this manner. One must ask whether the promoters, who as yet remain unidentified, are seeking to avoid the necessity of obtaining planning permission in order to use the wide powers of construction and demolition.
A further power is to stop up footpaths, extinguishing present rights of way in the process. I am sure that the environmental lobby in the House—some hon. Members supporting it have already spoken in the debate—will want to look long and hard at the power granted to a private company to stop up footpaths throughout the Killingholme area and extinguish rights of way, which might have been there for many years. The people of the area are to lose their amenities without any redress against the authority that will remove them.
There is another interesting power in the Bill, which enables a company that remains unidentified to take at least 10 years to do the works in question. If the need for those facilities is so pressing in Killingholme, why is there a power in the Bill to allow the company to take 10 years to build the terminal? Surely that is contradictory. However, like outline planning permission, it could be a selling point for the company. As we have heard, the

company appears to be changing hands at a rapid rate, so when it is offered for sale again to the next bidder it will be able to advertise the power of having 10 years in which to build a cargo terminal. So much for the pressing need for port facilities on the Humber. This is simply a speculative Bill.

Mr. Harry Barnes: Is my hon. Friend aware that under the North Killingholme (Admiralty Pier) Act 1912—the pier was built with much earlier technology—the period permitted for building was nearly seven years?

Mr. Illsley: My constituents speak of little other than North Killingholme Cargo Terminal Bills——

Mr. Barnes: And Admiralty Pier Bills.

Mr. Illsley: —and Admiralty Pier Bills. My hon. Friend makes an interesting point.
The Bill contains a power to impose special penalties if works are obstructed. Why should that power be contained in the Bill? Does the company expect the works to be obstructed? Why should there be local opposition to the construction of these facilities? Does the company expect obstruction because of local opposition? I remind the House again that local people cannot take on the company.

Mr. Skinner: Why should there be opposition? It is not long since the hon. Member for Brigg and Cleethorpes (Mr. Brown) was encouraging opposition to dumping nuclear waste in his constituency. He threatened to resign, and he did not get paid for that. Naturally, these matters lead to demonstrations. My hon. Friend is right to say that not only will this upset miners in Nottinghamshire, south Yorkshire and Derbyshire, but will upset environmentalists, ramblers and so on. If so many groups are against the Bill, who is in favour of it? It must be that the Prime Minister and those in South Africa are in league and are determined to pass the Bill, come hell or high water.

Mr. Illsley: I thank my hon. Friend for that intervention. It is obvious from what we have seen so far that the Government are determined to get the Bill through the House.

Mr. William O'Brien: In view of the contributions of my hon. Friends the Members for Bolsover (Mr. Skinner) and for Barnsley, Central (Mr. Illsley) about the delay and the number of people, including environmentalists, who object to the Bill, should there not be a public inquiry, in fairness to all concerned? Would that not be more in keeping with the position than proceeding in this way?

Mr. Illsley: My hon. Friend makes a valid point. Obviously a public inquiry would be preferable to the Bill, which only Members of Parliament can debate. The public in Killingholme have no opportunity to make representations about the wide powers in the Bill.

Mr. Skinner: Normally when a Bill goes through the House there are hon. Members for and hon. Members against it present in the Chamber debating it. Nearly everybody present, including Conservative Members, is against this Bill. If an hon. Member moved the closure and you, Mr. Deputy Speaker, accepted it—I do not believe that you should—the Tory Whips, acting like shop stewards, would herd Conservative Members into the Aye


Lobby, while all the hon. Members now in the Chamber would vote in the No Lobby. It is strange that those who support the Bill are outside the Chamber and do not know anything about it, except what the Prime Minister has told them to do.

Mr. Illsley: I am grateful to my hon. Friend for making those valid points. So far, only one hon. Member has spoken in favour of the Bill. My hon. Friend made an interesting point about the hon. Member for Brigg and Cleethorpes opposing the Nirex proposals. I hope that those who oppose the Bill will be as successful as the objectors to Nirex were and that we shall prevent the terminal from being built.
After the powers come the byelaws. The company is seeking power to make byelaws. Surely Parliament should take great care before granting a private company the power to make byelaws. As my hon. Friend the Member for Bolsover (Mr. Skinner) said, the majority of hon. Members are outside the Chamber and not listening to the debate. If more were present to listen to the list of powers, byelaws and special directions, they would be more inclined to vote against the Bill.

Mr. Ashton: Did my hon. Friend notice that when my hon. Friend the Member for Bolsover (Mr. Skinner) accused the hon. Member for Brigg and Cleethorpes (Mr. Brown) of being paid to promote the Bill the hon. Gentleman had plenty of opportunity to deny it? There is no mention of that in the Register of Members' Interests. Time and again when the allegation has been made the hon. Gentleman has taken no notice, but continued to sit and talk to his hon. Friends. He refuses to answer these allegations. Is the hon. Gentleman being paid to promote the Bill? If so, are we entitled to know how much and by whom?

Mr. Michael Brown: No, Sir.

Mr. Illsley: The hon. Gentleman is being economic with his contributions to the debate. Obviously, he has had the opportunity to inform the House of his interest in the Bill.

Mr. Brown: I have no financial interests, only a major constituency interest.

Mr. Illsley: The hon. Gentleman has a constituency interest, as have many of my hon. Friends and some Conservative Members. It is interesting to note that he implies that his constituency interest outweighs the interests of his constituents, to which I have referred, such as the amenities that will be taken from them.
The Bill will give the company power to create byelaws for 19 different purposes. Clause 21 will give the company power, by a byelaw, to discharge into the terminal any material or substance. A chemical and oil company is asking the House for power to create a byelaw to tip chemicals, oil and anything else that it sees fit into the Humber. I wonder whether the people of Killingholme are aware of these powers and whether they would agree to such a byelaw. I hope that the environmental lobby will take note of that.
The company also wants power to regulate fishing in that area of the river—that is, if there are any fish left in the Humber after the company has finished discharging chemicals and oil into it. Again, amenities will be removed.

It seeks a byelaw to regulate bathing. I am not sure that I should like the idea of bathing there, in view of the possible discharges if the Bill is passed.

Mr. Michael Brown: I am merely speculating on whether the hon. Gentleman would contemplate bathing in the River Humber now.

Mr. Illsley: I would consider bathing in any clear river in this country. I would campaign for the River Humber to be cleaned up, and for the Bill to be stopped, so that the river is not further polluted. It is sad that the hon. Gentleman should have to challenge Opposition Members on whether they would bathe in a river in his constituency which he obviously believes to be polluted.
Let me remind the House of the wide powers that the company is seeking. They will be unrepresentative, and the people of Killingholme will have no redress. Moreover, another byelaw in the Bill allows the company to levy fines. Anyone in breach of one of the company's byelaws or caught by one of its powers or special directions can be fined.
There is another good clause in the Bill. Just in case the company has left anything out of the 19 byelaws and the powers to which I have referred, clause 21(3) allows it to make
different provision for different circumstances.
It says nothing specific, just "different circumstances." What sort of different circumstances are meant, and what sort of different provision is the company seeking? Which company is seeking those different provisions? Perhaps the hon. Member for Brigg and Cleethorpes should identify it.

Mr. Michael Welsh: That is an important issue. The company does not have the money for which it is applying, and cannot raise it until a meeting is held in September. If it is decided that the company cannot have the money—it could he just over £3 million—it means that nobody knows what will come out of the terminal. It could be anything.

Mr. Illsley: I am grateful to my hon. Friend for making such an important point. We could be passing a Bill that would give powers to a company about which we know nothing, and we have no idea whether it can raise the finance. We arc being asked to take a shot in the dark by giving the Bill a Second Reading.
Clause 21(4) allows the company to take on the powers of a local authority—the power to make byelaws and give special directions—while being unaccountable. A local authority must be accountable to its electors. That is a key issue that goes to the heart of the Bill, and I hope that, should we be so unwise as to give the Bill a Second Reading, the Examiners will consider it in detail.
After the byelaws come the special directions. There are only a dozen. Fines can again be imposed on anyone in breach of them. There are further powers, including the power to sell the entire undertaking. We are being asked to give a Second Reading to a Bill whose sponsor we cannot identify, and are giving the sponsor the power to sell or lease the undertaking to a further body whose identity we do not know either.
The Bill also gives the power to mortgage, and a further key power to transfer all the powers that I have mentioned to any of its subsidiaries. That makes a mockery of the drafting of the Bill. The powers, special directions and byelaws are listed in minute detail, but neither the identity of the parent company nor that of any subsidiary is given.

Mr. Harry Barnes: As my hon. Friend points out, this is a massive piece of legislation. It has 19 extensive byelaws, and it refers to 10 other bits of legislation to be incorporated. At one stage it refers to the Harbours, Docks, and Piers Clauses Act 1847. Although 31 sections of that Act are excluded, 72 are to be incorporated. That means that when the Bill comes back on Report we must go through all those provisions.

Mr. Illsley: I am grateful to my hon. Friend. I, too, consulted the Harbours, Docks and Piers Clauses Act, which is in the Library, and abandoned the idea of reading it, such was its length. When combined with this Bill, it would give very wide-ranging powers.
The Bill can be boiled down to three main powers. The first is the right to do the work over 10 years. The second is the right to sell the terminal, with that power to construct over 10 years. Thirdly, the powers and byelaws in the Bill can be transferred to a subsidiary. This is a speculator's document. The speculators are banking on the import of coal because of the decision announced in February this year to privatise the electricity supply industry.
The Secretary of State has said that there will be a free-for-all over the purchase of coal supplies by the CEGB and it will be able to choose the cheapest source for its fuel. The sponsors of the Bill have not been slow to react to the White Paper. A recent speech by the Secretary of State for Energy to the Institition of Mining Engineers gave the game away. He said:
But there is a limit to the rate at which coal imports could build up in any case—for a start they will be limited by the lack of handling facilities.
That is a key quote that was not missed by the hon. Member for Brigg and Cleethorpes or the Bill's sponsors. They have taken the Secretary of State at his word and have decided to put right what he sees as a lack of coal-importing facilities by starting to build them.
The hon. Member for Brigg and Cleethorpes is a member of the Select Committee on Energy. He knows the evidence given by the CEGB in and after 1986. In 1986 the CEGB said that it could get another 10 million tonnes of imported coal into the country quite easily, and within two or three years could bring in another 30 million. Why, then, is there any need for these port facilities? Since then the CEGB has revised its estimate, and in recent evidence to the Select Committee and in recent statements has mentioned 50 million tonnes.
Even more disturbing is the fact that the SSEB did not wait for the privatisation of the electricity supply industry, but went straight out for imported coal. In doing so it has put in jeopardy the whole Scottish coalfield. It is interesting to note that the three-month period in which negotiations were to take place between British Coal and the SSEB expired today. If those coal contracts are not sorted out amicably, there could be a drastic announcement about the Scottish coal industry in the next few days.

Mr. Skinner: Surely this is a short-sighted policy for anyone, including the Secretary of State for Energy, whom I am told now has a new job, in charge of the Star Chamber. Within our short political lives many people have come along with bright ideas, assuming that a particular situation would go on for ever. At the moment there is some cheap coal knocking about on the market, especially from South Africa. At one time there was a lot of cheap oil, but then in 1973–74 it went up to four times

the price. This is a very short-sighted policy. That is probably one reason for the 10-year period in the Bill, SD that the speculators can pounce at the appropriate time in case the market turns against them.

Mr. Illsley: My hon. Friend reinforces the point. It is a Bill for speculators. The sponsors have 10 years in which to chance their arm in the market for cheap imported coal. The promoter knows that British ports can bring in more coal than the Secretary of State believes. The promoter just wants his South African connections to get in early and cash in on the imports. We are led to believe that the world is awash with coal imports just waiting to be dumped in this country through the Humber and other ports. The promoter and his confederates just want to get in early to promote the South African coal industry.
If we consider the capacity of existing British ports and those already under construction, we can calculate the capacity for importing coal or, indeed, any other cargo. Taking the maximum ship size and the fastest unloading time for each port, this country could import 27·7 million tonnes of coal, assuming total devotion of all ports to those imports. In practice, the figure would clearly be much lower. In 1985, in the absence of any specific policy—we have heard from Conservative Members how the Nottinghamshire miners brought this about by keeping their lights on—12 million tonnes of coal were imported. So we already have facilities to bring in plenty of cheap coal.
Let us consider the maximum capacities of the various ports. Gladstone dock, Liverpool, can bring in 4 million tonnes. Southampton and Fawley could bring in 8 million tonnes. That is the other 25 per cent. of the South African connection. The ex-Shell refinery site, Tees and Hartlepool, could bring in a further 5 million tonnes. Kingsnorth on the Thames could bring in 5 million tonnes. The Humber ports could bring in 7 million tonnes if this Bill and the Associated British Ports (No. 2) Bill are passed. In Scotland, at the Hunterston terminal, Grangemouth and even Rothesay, 2 million tonnes could be brought in. That makes a total of 31 million tonnes. Added to the 27 million tonnes, that makes 58 million tonnes capacity. It is thus not true that a new facility is needed. The fact that the sponsors are allowed 10 years to build it makes that clear. Imports from the Humber are simply not needed.
The figures that I have given are somewhat theoretical, as they would entail total devotion of all ports to the import of coal. Nevertheless, 12 million tonnes were imported in 1985 and the CEGB stated that a further 30 million tonnes could rapidly be brought in. Adding the 31 million tonnes that I have mentioned to the 12 million tonnes that were actually imported gives a total of 40 million tonnes.
Every hon. Member who has contributed to the debate, apart from the promoter of the Bill, has pointed out that that scale of imports would have a devastating effect on the British coal industry, especially in south Yorkshire and Nottinghamshire. It could mean 50 to 60 further colliery closures and a further 60,000 jobs lost. The British coalfields would face the same devastation as we saw in 1985 and 1986. Since then, 107,000 jobs have been lost in the British mining industry. In my constituency unemployment is still about 17 per cent., and in


neighbouring constituencies the figure is as high as 22 or 23 per cent. in some areas. We do not want that kind of devastation again.
As Conservative Members have said, we want our industry to achieve the targets set for it. In 1985, whole villages and communities were blighted by the rundown of the coal industry. The proposed imports are unnecessary. Our coal industry is on target to compete internationally and to break even by the end of this financial year, but even if British Coal dropped its price tomorrow the Government and the CEGB would still not buy that coal. They would look elsewhere. They would support the promoter of the Bill and his South African interests. They would support their comrades in South Africa, who make profits on the backs of exploited labour.
Why should that be? The Conservatives are always talking about competition in the market place. If British Coal dropped its prices, it would make sense for the electricity industry to buy British coal. Why should that not be so? The hon. Member for Brigg and Cleethorpes will be aware of the recent evidence of Lord Marshall of Goring to the Select Committee. He said:
However, British Coal also has 99 per cent. of our market and therefore there has to be some change"—
not because British coal is too expensive, but because it accounts for 99 per cent. of the market. The Conservatives want away from British Coal, and their motive has nothing to do with market prices.
We have heard that collieries are to close in the next two or three years, although they would have been profitable by 1995. The Financial Times coal report has stated that it would be a shortsighted policy and a mistake to close collieries that will be profitable in a few years' time. We have heard that the world price of coal will increase as soon as any country starts dipping into the market. Conservative Members have pointed out that coal is being dumped in this country, especially from Colombia, at far less than the cost of production. It is not merely expensive to reopen collieries once they have been closed—it is damned nigh impossible. We should not close those collieries, and we should not allow legislation of this kind to pass. I call on all hon. Members to vote against the Bill.

Mr. Jim Lester (Broxstowe): I should like to draw together some points that have not been made and to support one of the remarks of the hon. Member for Bolsover (Mr. Skinner). My hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) is promoting the Bill because of a constituency interest. To link the Bill with South Africa, as some hon. Members have done, is not the way to deal with a private Bill. I am sure that Labour Members, because of their considerable rhetoric, will persuade many of their colleagues to follow them into the Division Lobby in voting against the Bill, but they failed to do so on the Associated British Ports (No. 2) Bill. There is no Whip for Conservative Members on this private Bill.
The hon. Member for Barnsley, Central (Mr. Illsley) gave an exposé of the speculative nature of the Bill. The House should take account of the 10-year period in which the work can be carried out. It is vital in this country's interests that we have a secure energy supply. I do not agree with the argument that British Coal wants to import coal. That is not in its interests, even when privatised.

British Coal wants to check that the accurate world price of coal is reflected in the price that it pays. That is not unreasonable. We are talking about the percentage of coal imports necessary to balance the fact that British coal can be produced at a reasonable world price. That is in the interests of the industry as a whole and of the electricity boards.
Some of us have been involved thoughout our lives in the life of Nottinghamshire. We remember when people thought that coal was out of date because oil was so cheap. I vividly remember, as I am sure does the hon. Member for Ashfield (Mr. Haynes) because we were on the same authority, that we thought that we could build oil-fired power stations because we did not need our coal. Many Nottinghamshire pits were closed at that time and many of us put a great deal of effort and energy into finding alternative jobs for the miners. It was believed that oil would remain cheap for a long time. The hon. Member for Bolsover rightly pointed out that that changed.
The same could happen with cheap imported coal. It is good sense to make an investment on the basis of need. The hon. Member for Barnsley, Central said that there were sufficient coal-importing facilities to balance the price of British coal against the price of coal on the world market. We do not need this facility to ensure that the price paid by the CEGB, or the privatised body that takes over, is fair and reasonable. That need is not proven.
Speculation that cheap coal produced in the rest of the world will undermine the price of our coal for all time is dangerous. Investment in strip mining in many of the countries mentioned by my hon. Friends was carried out on the basis that oil prices would remain high. That is why many oil companies speculated in Australia, Colombia, and other countries. They thought that strip mining of that energy source would be profitable.

Mr. Michael Brown: My hon. Friend is right. It would be ridiculous from an investment point of view for anyone to consider putting a new port facility in North Killingholme solely on the basis of securing that facility's future through coal imports. I draw my hon. Friend's attention to the fact that this facility is not just for coal. As I said on 22 June, the purpose of the facility is to take bulk commodities—not only coal but
grain, coal, coke, aggregates, fertilisers and minerals."—[Official Report, 22 June 1988; Vol 135, c. 1183.]

Mr. Lester: My hon. Friend may make the case for bulk commodities, but most of us recognise that the key bulk import that can be handled much more cheaply at this facility is coal.
The oil companies that invested in this production world wide have burnt their fingers. They have invested and overproduced, which is why the spot prices at Rotterdam are so low. My hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) referred to China coming on to the world market. China is a big coal producer that wants hard currency and is not too bothered about the price. We have seen this all before. We do not need to rewrite history. Those of us who lived through the 1960s and saw the impact on the coal industry of the Labour Government's short-sighted policy do not want those events to happen again.

Mr. Terry Patchett: I am pleased to catch your eye, Mr. Deputy Speaker, so that I can speak in this debate. I shall be as brief as possible, as I am aware that many hon. Members with constituencies similar to mine wish to speak. These are all constituencies where employment has already been heavily hit by the Government's attitude to the coal industry and the closure programme of British Coal.
This private Bill may appear to be quite innocent, but its enactment would devastate our constituencies. I accept that this is a private Bill, but I am convinced that the Government support it, and that it is all part of their plans for the energy industry and the privatisation of that industry. Not only would their supporters be in a position to buy our power industry, but this Bill would provide the opportunity to import cheap, subsidised coal. I am satisfied that, although the Bill is not Whipped, as happens with other Bills, just before the vote is taken, we shall see the arrival in the Chamber of the so-called payroll vote.

Mr. Meale: My hon. Friend mentions the payroll vote. We are debating a vital subject, and Nottinghamshire has been mentioned many times, but, again, only three Nottinghamshire Members are on the Tory Benches, including the hon. Member for Nottingham, South (Mr. Brandon-Bravo). Is that not disgraceful?

Mr. Patchett: That needs no further comment from me.
My hon. Friend the Member for Barnsley, Central (Mr. Illsley) spoke about the Secretary of State's speech to the Institution of Mining Engineers, in which he said that imports are limited by handling facilities. This reflects the Government's attitude. Why did he have to make that comment? The Centre for Fiscal Studies, another Tory think tank, has called for 30 million tonnes or more of coal imports. This Bill and others like it will provide facilities that will meet that demand eventually. We are all aware of the recent visit of a high-powered delegation from South Africa, looking for markets, a delegation that had sympathy and support from Tory Back-Bench Members. All these considerations lead me to suspect that Tory Members will vote strongly in favour of the Bill.
To put the matter into sharper perspective, let us look at a recent decision by the South of Scotland Electricity Board to import 1 million tonnes of coal, part of this contract to be filled by Shell, itself subject to an anti-apartheid contract. Apparently, Shell has sent out subtenders for 20,000 tonnes of coal to be shipped from Rotterdam to the Firth of Forth. This means only one thing—a South African blend. Coal is shipped to the huge complex of Rotterdam and then blended and re-exported as Netherlands coal. There are suggestions that we already import 200,000 tonnes of South African coal in this way.
I could speak at great length about the morality of dealing with South Africa, but instead I shall speak about the inherent dangers of our electricity supply industry relying on subsidised cheap coal imports. This will last only until our coal industry is decimated. Even the chairman of British Coal has expressed fear for the future.
It is no accident that the CEGB is looking at coastal sites for future power stations and that privatisation is on its way. We are all aware that it has already applied for planning permission to build a new 1,800 MW station at West Burton, on the Trent. That will be the closest power station to North Killingholme cargo terminal. Therefore,

if West Burton A and West Burton B were to be privatised, the CEGB would be in a good position to import coal for those stations from South Africa and other countries, which even now rely on child labour in some instances to provide cheap coal.
The use of South African coal may not come about immediately, but we all know that certain Tory Members have visited South Africa and discussed coal sanctions with the mining industry in that country. They are against the CEGB ban on South African coal and they may even have encouraged South African business interests to buy into the United Kingdom electricity supply industry on its privatisation.
I have already referred to the West Burton power stations and their likely use of imported coal.

Mr. Skinner: My hon. Friend has said that Tory Members have been to South Africa on paid visits and have come back to support Bills of this nature. He is absolutely right. Does he accept that they are subject to a system of apartheid voting in the House of Commons? The Tory Whips have told the few Nottingham Members bordering on the coalfield areas, "You can have one system of voting and you can vote with the Labour party, as long as you acknowledge that the rest of us will have another form of apartheid voting. We will vote in substantial numbers for South Africa and South African coal." That is what the game is all about—an apartheid system of Tory voting.

Mr. Patchett: I am grateful to my hon. Friend for exposing some of the Tory Members' double talk on apartheid and their support for South Africa.

Mr. Brandon-Bravo: Will the hon. Gentleman give way?

Mr. Patchett: I have just given way.
The Bill would enable the North Killingholme cargo terminal to import 2 million tonnes of coal per year, which would be aimed at the Trent and Aire power station markets. If that were to happen, constituencies such as mine would be devastated. We already have one of the highest unemployment figures in the country and there is little prospect for the young unemployed. The effects of the Bill are unthinkable.
It is ironic that the problems will also apply in constituencies in Nottingham which supported the Government during the miners' strike and betrayed their comrades in Yorkshire and other areas. It is a poor reward for their treachery. I hope that the leaders of the Union of Democratic Mineworkers and its membership realise the consequences that the Bill will have on their communities. It may be that North Killingholme has an unemployment problem, for which I have every sympathy. However, to steal jobs from other areas is madness and a poor investment.
The Bill does not have the interests of the country at heart. One can imagine the effect on our balance of payments and the likely increase in costs to our energy industry when the Government have finally decimated our coal industry. It will not be the greedy few who will benefit from privatisation——

Mr. Andy Stewart: Will the hon. Gentleman give way?

Mr. Patchett: I said that I would be brief so that all interested Members would be able to take part in the debate.

Mr. Stewart: rose——

Mr. Patchett: The hon. Member for Sherwood (Mr. Stewart)——

Mr. Skinner: Will my hon. Friend give way to me?

Mr. Patchett: Yes, I will give way to my hon. Friend.

Mr. Skinner: My hon. Friend knows who his friends are. Does he realise that during the debate on the Associated British Ports (No. 2) Bill the hon. Member for Sherwood (Mr. Stewart) sent a letter to some of his Tory friends telling them to stay on for dinner? He said, "Hang on for dinner." He got nobody to back him. The people to whom he sent the letter stuck up two fingers. They turned up and voted with the Tory Front-Bench Members and Tory Whips. He sent out that letter and did not receive any support apart from that of a handful of hon. Members in the Nottinghamshire area.

Mr. Patchett: The information given by my hon. Friend is fascinating. Some of the information that one hears in the Chamber is remarkable. I hope that the hon. Member for Sherwood will listen and learn.

Mr. Andy Stewart: On a point of order, Mr. Deputy Speaker. The letter to which the hon. Member for Bolsover (Mr. Skinner) referred resulted in 300 Conservative Members staying away from the House, which was its objective. Of those who voted for the Bill, four were parliamentary private secretaries but there was only one Cabinet Minister. The rest stayed away.

Mr. Deputy Speaker: Let us return to the debate.

Mr. Patchett: The hon. Member for Sherwood should sit quietly, listen and learn.
It will not be the greedy few—who will benefit from privatisation—but the public who will have to pick up the bill for the increases in unemployment. The customer will suffer increased electricity prices because no one will buy into an industry that is making a loss.
The Government's strategy, under the guise of a private Bill, is government by deceit, which I find abhorrent. I hope that all hon. Members will recognise that and show their disgust in the Lobby.

Mr. David Hinchliffe: The purpose of the Bill and of the Associated British Ports (No. 2) Bill, which we discussed last week, is clear. It is designed, as other hon. Members have said in detail, to open up the heart of the British coalfields to import penetration. It is designed specifically to shunt foreign coal on to the doorsteps of the power stations in the Aire and Trent valleys, which currently are supplied by the Yorkshire coalfield and especially the midlands coalfield. The hon. Member for Mid-Worcestershire (Mr. Forth), who is a friend of South Africa, is happily nodding his head at that fact.
I have three objections to this legislation. First, such imports would be the kiss of death for the coal mine that is left in my constituency and to the Yorkshire and midlands coalfields. There is evidence to prove that fact.
My second objection is that the provison of specialised additional port facilities—we understand the connections of the hon. Member for Brigg and Cleethorpes (Mr. Brown)—will boost the import of South African coal.

Mr. Eric Forth (Mid-Worcestershire): And Polish.

Mr. Hinchliffe: I am sorry that the hon. Gentleman should try to intervene. The Bill raises moral issues that concern me, my constituents and other Labour Members.
My third objection has been made effectively by my hon. Friends and by some Conservative Members. It is economic nonsense, with British Coal moving to profitability and being competitive in international markets, to allow vast amounts of imports to penetrate our market.
I make no apology for taking a parochial attitude to this matter, as other hon. Members have also done. My family has had connections with the mining industry in the Yorkshire area for nearly 200 years. The coal industry remains the life-blood of the local economy in Wakefield, the rest of Yorkshire and, indeed, the midlands, and I am deeply worried about its future. The industry is fighting for survival.
Let me give some facts and figures which are relevant to the debate. When the Government came to power in 1979, the Wakefield constituency had 4,395 jobs in mining at eight pits. Now we have 565 jobs at one pit complex, the Denby Grange Calder drift complex. That huge reduction worries me and my constituents, as well as my hon. Friends. One aspect that has not arisen out of this debate or our previous debates on similar legislation is the knock-on effect of the reductions on other industries. I am especially anxious about the engineering industry and the service sector. People forget that corner shops and supermarkets and other places of employment—especially for women—are directly affected by the reduction of employment in the mining industry.
I shall concentrate on the impact of the figures on engineering in my constituency. British Ropes, a famous company of long standing, closed down in 1986, with a loss of 180 jobs. That closure was directly related to the rundown of the coal industry. In 1986 British Jeffrey Diamond, a famous company with a record second to none in manufacturing and exporting mining machinery, employed 950 people in my constituency; it now has 780 employees there. There have been 90 redundancies in the past two months alone. That, too, is directly related to the Government's deliberate running down of the coal industry. Fletcher Sutcliffe Wilde, another company in my constituency, is a major exporter. We should be concerned about such companies, given the drop in exports and the balance of trade figures announced last week. That company employed 781 people in my constituency in 1981, but the figure is now down to 385. There have been 30 redundancies at that company in the past two months. One point made forcefully by the management of that company when I visited it recently is that the rundown of British pits makes it more and more difficult for it to market machinery for export. The company needs British pits to display machinery and to show people from abroad the expertise available in the British mining and engineering industries. The management argued strongly that the engineering and mining supplies industry depends heavily on the prosperity of British Coal. We should consider that in the context of the Bill.
In Wakefield metropolitan district, there were 15,061 mining jobs in 1983; now there are 4,252; and 2,225 jobs have disappeared so far in 1988. A research report from Leeds university published only today shows the full economic cost to the area. The hon. Member for Nottingham, South (Mr. Brandon-Bravo) talked about massive wasteful subsidies. Let us consider the figures in


the report. Since 1985 the reduction in the Wakefield metropolitan district has cost British Coal £65,585,000 in redundancy payments alone. It has cost Wakefield metropolitan district about £5·5 million in loss of rate revenue and resources to meet the additional needs of unemployed miners. It has cost central Government about £169 million in redundancy contributions, loss of income tax, rent and rate rebates and unemployment benefits, and it has cost £884,000 in European Community redundancy contributions. That is a total of £241 million. Conservative Members refer to massive wasteful subsidies, but look at what it is costing British taxpayers and ratepayers to keep people unemployed in the coal industry.

Mr. Allan Rogers: When my hon. Friend talks about subsidies, will he take account of the fact that agriculture receives subsidies which far exceed those received by mining? Would he like to reflect on why Conservative Members never oppose such subsidies?

Mr. Hinchliffe: My hon. Friend is right to contrast the Government's attitude to those two industries. It is important to kill the idea that when a pit is shut down it costs the public no more through subsidy. The economy is drained by our having people chucked on the dole and the other costs which I have mentioned and which are described in the report published today by Wakefield metropolitan council.
We often talk about Government assistance to areas such as mine, but Wakefield metropolitan district has received no assistance, bearing in mind the number of jobs that have been lost. I shall give the Government's record of assistance to the area. In 1982, they scrapped the industrial development certificate system, which had a direct bearing on northern constituencies and districts such as mine. Also in 1982, they took away assisted area status and, most recently, in 1985, they took away our eligibility for urban development grant, which we had previously used well to generate employment.
I should like to say something about South African coal. My hon. Friend the Member for Barnsley, West and Penistone (Mr. McKay), who unfortunately is not in the Chamber at the moment——

Mr. Forth: He could not give a toss.

Mr. Hinchliffe: If the hon. Gentleman wants to make a point, I shall happily give way to him. I know that he represents South African interests. If he wants to say his piece, I shall give way to him.

Mr. Forth: I am grateful to the hon. Gentleman for giving way. He will recall that when this matter was last before the House, about 50 of his 229 colleagues cared enough about the issue to be in the House early on a Thursday evening to vote on it. It is all very well for the hon. Gentleman to lecture us about morality, but when enough of his colleagues turn up in the House to back their words with action, I shall be impressed.

Mr. Hinchliffe: I would not waste my time lecturing the hon. Gentleman on morality.
I shall continue with the point that I was about to make. My hon. Friend mentioned an event that took place in his constituency yesterday. I attended, but not as an invited guest. We were commemorating the 150th anniversary of the Husker pit disaster, when 26 children were killed as a direct result of exploitation by mine owners.
I am glad that the hon. Member for Mid-Worcestershire is leaving, as my argument would be wasted on Conservative Members who are lackeys of the South African Government. That is the job that they are here to do. They are here to give excuses for apartheid.

Mr. Redmond: On a point of order, Mr. Deputy Speaker. I do not know whether you heard what the hon. Member for Mid-Worcestershire said as he was leaving the Chamber, but I understood that he was leaving to secure a Division. I hope that that is not the case. If it is, is he not presuming your good nature and the policy of the Chair? I hope that the hon. Gentleman will say that that is not the case.

Mr. Deputy Speaker: Let us get on with the debate.

Mr. Hinchliffe: There is a clear similarity between what is being commemorated in Yorkshire today—the 150th anniversary of a pit disaster in which 26 children were killed—and what is happening this very day in South Africa and in the mining industries of other Fascist regimes. Lives were cheap 150 years ago. Children's lives were cheap. I went along yesterday because my great grandfather was a 10-year-old child in that area when those 26 children were killed. I went because there are family associations and memories of the event, and I feel deeply about it. It nauseates me when I see Conservative Members grinning happily at what is happening in South Africa, where 1,000 miners are killed every year. Those people are promoting South African coal.
The fact that scores of miners are still being detained following the strike in South Africa is a disgrace in this day and age. We all know that South African coal is coming into this country. A company called Optimum, in the constituency of my hon. Friend the Member for Hemsworth (Mr. Buckley), already openly imports South African coal. That is a disgrace. Conservative Members want to import even more South African coal, despite the moral implications.
I must say something about the role of the hon. Member for Brigg and Cleethorpes. On the first occasion that we debated the principles of the two Bills, I said that the South African coal industry had recently formed in Britain an organisation called the Office of South African Coal specifically to advance its case. Anti-apartheid News said in January:
A group of Conservative Members led by the hon, Member for Brigg and Cleethorpes is believed to have connections with the office of the South African coal industry.
On 5 April 1988 The Times noted the visit to South Africa of a delegation of Conservative Members who claimed that the South African coal industry should not have sanctions applied by Britain or by the EEC. Of course, that delegation included the hon. Member for Brigg and Cleethorpes, who is openly promoting the Bill.
Following that visit people from the South African coal industry came to Britain looking for ways and means to support the moves to import South African coal.

Mr. Skinner: Will my hon. Friend——

Mr. Deputy Speaker: Order. Is this a point of order?

Mr. Skinner: No. My hon. Friend is giving way. There is more to say yet on the South African matter.
Did my hon. Friend notice that while he was speaking about South African interests and all their lackeys, one of


the Government Whips, who is sitting near to Mr. Deputy Speaker, spoke to the Bill's promoter—another South African supporter in the House—and said that there would be a vote before 10 pm? That really is an attack upon the Chair because it presupposes that the Government Whips and the promoter of South African interests have it in their power to close the debate. I suggest, Mr. Deputy Speaker, that you have a cast-iron opportunity to prove that you will not be a lackey of the Tory Front Bench. You must refuse that closure. I hope that my hon. Friend agrees with that.

Mr. Rogers: On a point of order, Mr. Deputy Speaker. If such a Division were called, would it be in order for Conservative Members who pay many visits to South Africa, financed by South African——

Mr. Deputy Speaker: Order. That is quite hypothetical. We must continue with the debate.

Mr. Hinchliffe: My hon. Friend the Member for Bolsover (Mr. Skinner) made some important points. It is disgraceful that the British Parliament is being so openly used. Other legislation has been put aside to discuss openly a Bill that promotes the interests of the most obnoxious regime in the world.

Mr. Illsley: Before my hon. Friend concludes his remarks, he should refer to the frequency with which the two Bills have come before the House during the past two or three weeks. He should also mention that the Government have been trying to push through these port facility Bills before the proposed legislation to privatise the electricity industry.

Mr. Hinchliffe: As a new Member, I am increasingly surprised by the way that this place works. Quite frankly, what has happened stinks. I say to people in the Strangers' Gallery that if they want a really good seat in this place, all that they need to do is to find a soft Tory Member to promote private legislation. They can then sit in the Under Gallery on the Floor of the Chamber and have an even better view of what is happening. It is interesting to note how those with a special interest in the Bill are sitting in that special Gallery while other members of the public are sitting——

Mr. Deputy Speaker: Order. I realise that the hon. Gentleman is a fairly new Member, but it is not in order to refer to the Galleries.

Mr. Hinchliffe: I accept that, Mr. Deputy Speaker. I raised a point of order during the debate on the sister Bill because it surprised me that we seemed to accept that people from private commercial companies could sit in the Chamber and hand briefs to the promoters of such obnoxious legislation. That is disgraceful.
On several occasions, the hon. Member for Brigg and Cleethorpes has been asked to make it clear that he has no pecuniary interest in the legislation. He has stated that he has not, despite the fact that the South African coal industry paid for his freebie trip there. No doubt he will have more freebies in future. Shortly after I came here, I vividly recall seeing my hon. Friend the Member for Bolsover being chucked out of this place for saying what I believed to be the truth when he raised the issue of another hon. Member who had been involved in

promoting the privatisation of British Telecom, and who now sits on the board and gets a good rake-off because of what he did here. What concerns me is not whether the hon. Member for Brigg and Cleethorpes is getting something now, but what he will get in the future. I am damn sure that he will get someting out of this before he is finished.

Mr. Bill Michie: I agree with the allegations that have been made today about certain Conservative Back Benchers. Does my hon. Friend agree that if the payroll vote goes through the Lobby tonight in favour of the Bill, they will be just as much implicated as anybody?

Mr. Hinchliffe: I agree with my hon. Friend, who has anticipated what will happen tonight and during the remaining stages as the Bill passes through the House.
Finally—I am aware that many of my hon. Friends wish to speak—I come back to the issue that has been stressed time and again by my hon. Friends and by certain Conservative Members. There is every reason to believe that British Coal will be able to compete with imported coal by 1995. All the information available proves that argument, and it is available not just from British Coal, the NUM or, dare I say it, the other union whose name I have forgotten. Other hon. Members have quoted the Financial Times article of 9 May by Prior and McClosky—an independent objective analysis—that demonstrated that, by 1995, our industry will be able to compete in the world. The hon. Member for Brigg and Cleethorpes is trying to smash that industry and the jobs in our areas. We must defend those jobs before any change takes place.
It is vital to the interests of my constituents, the rest of the Yorkshire coalfield, the midlands coalfield and elsewhere in Britain that we retain a viable coal industry and do not destroy the pits that, on any objective analysis, will be competitive in the near future.

Mrs. Llin Golding: I oppose the proposals. The miners of Staffordshire say that we should not be investing in ports to facilitate the importing of coal, but that we should be investing in British Coal. It is already clear that the development of the Gladstone dock at Liverpool to supply Fiddlers Ferry power station with the bulk of its 4·5 million tonnes per year is likely to be harmful. I am told that those imports will threaten jobs at Silverdale colliery in my constituency and the jobs at Hem Heath colliery, where many of my constituents work. If imported coal were used at Rugeley and Ironbridge, that would add to the threat to Hem Heath. It would not be right to put those pits at risk by the production of British opencast coal. To threaten them with coal imports is economic lunacy.
In the Staffordshire coalfield, Silverdale pit has done well. It has been a model pit, the men have worked well, investment has taken place and production records broken. No imported coal that puts those jobs at risk can be described as cheap—it would be very expensive. Even on the Department of Employment's doctored figures there are more than 8 per cent. unemployed in my constituency, and we must not add to that number.
Taking coals to Newcastle—my Newcastle—would be lunacy in social and economic terms. What is the point of producing lower-cost electricity—lower-cost only for the


moment—if it means that we have to pay out more in unemployment benefit? But it is not only a waste of money, which is estimated at £21 million a year by the unemployment unit for Newcastle. What worries me is the waste of men's lives. Our miners should be producing coal, and the Bill brings a threat to miners throughout the coalfield. The immediate impact of the work at Immingham, North Killingholme and King's Lynn will be on pits in Yorkshire, north Derbyshire and Nottinghamshire, where eight collieries and 9,000 miners' jobs could go. Engineers estimate that the work at Immingham and King's Lynn will cost £34·5 million, and that the work at North Killingholme will cost £4,209,000, but they have ignored completely the real costs to our mining communities and to those who produce mining equipment.
The implications for Yorkshire, north Derbyshire and Nottinghamshire are clear, but the story will not end there. The attack on our mining industry will continue and spread. Efficient, profitable pits will close as the Central Electricity Generating Board takes advantage of coal dumped here. Colombia plans to sell coal at a great loss, as the Australians have done. It is not only their loss, it is our loss. The Financial Times made it clear that protecting the British coal industry would make economic sense. The result of buying cheap coal now will be dearer electricity in the long run. That will hit many other jobs, too. The Government have devastated our industrial base, and the Bill will add to that devastation.

Mr. George J. Buckley: I am pleased to be able to speak in the debate. I have listened to the debate during the two days allocated to it, and I recognise that there is a conflict of interest between British Coal and foreign imported coal, especially South African. Conservative Members seem to be sensitive to any mention of South Afrcia, and it is not surprising that the sponsor of the Bill, the hon. Member for Brigg and Cleethorpes (Mr. Brown), recently visited that country and has been associated with the mining industry in southern Africa.
This is a debate about economics. The economic case made by hon. Members for the North Killingholme port does not bear examination. The hon. Member for Brigg and Cleethorpes says that he has promoted the Bill in the interests of his constituency. That is questionable, but at least it is an honest statement. But what he and the House must consider is whether his constituency's interests are more important than the nation's interests. There is no doubt which interest is paramount to Opposition Members. If the Bill is successful, it will cause devastation in other parts of the United Kingdom. I understand that the hon. Gentleman wishes to generate employment in his constituency, but the Bill will have far-reaching consequences for other constituencies.
The Secretary of State for Energy told the Institution of Mining Engineers that one of the factors affecting the imposition of imports on the mining industry was the limitation of the facilities for importing and handling such coal. Since then, private Bills have been brought in to rectify that. It is clear why they are being promoted. My hon. Friend the Member for Barnsley, Central (Mr. Illsley) said that there is more capacity for importing coal than is being used by the importing companies. I suggest that

these new ports and facilities are being promoted to handle larger tonnages with larger vessels. At Killingholme, for instance, facilities will be provided for vessels that can import 65,000 tonnes. The Associated British Ports (No. 2) Bill will provide facilities for 100,000 tonne vessels. Imported coal is already coming in from Rotterdam and other continental ports, but how much more profitable it will be if it arrives in vessels of larger tonnage.
It is obvious that the hon. Member for Brigg and Cleethorpes is not concerned with the economic argument. He is happy to accept the promoters' praise, if not financial appreciation, for promoting the Bill.—[Interruption.]

Mrs. Alice Mahon: On a point of order, Mr. Speaker. A Conservative Member has just used a very offensive term. I ask him to withdraw it. It offends all decency.

Mr. Speaker: I heard no offensive term. I was listening with great care to what the hon. Gentleman was saying. I hope no such term was used.
I may say to those hon. Members below the Gangway, whom I have been watching rather than listening to, that they should listen to the speeches and not chat to each other.

Mr. Buckley: I did not hear the offensive word to which my hon. Friend referred, but the offensive word that I have heard constantly in this debate is apartheid. It is obvious that the Government, unlike the Governments of most nations, are not prepared to urn their face against it. This Bill presents the Government with an opportunity to oppose apartheid by opposing its passage through the House—but they are supporting it. By promoting this private Bill the Government are assisting the Botha Government in South Africa.
The hon. Member for Nottingham, South (Mr. Brandon-Bravo) made a valid point about why there is a surplus of low-priced coal in the international market. I agree with his view that there is a bulge in international production of coal as a result of the large investment that took place after the escalation of coal prices because of the middle east crisis. There is now a flood of cheap coal on the market because that capital investment's results have come on to the international market. This coal must be sold at all costs, and the most natural place for it to find a market is in the United Kingdom, because of the Government's intention to privatise the electricity industry. The chairman of the electricity board told the Select Committee on Energy that the CEGB was in a position to import 30 million tonnes of coal in the next three years.
There seems to be a combination of circumstances encouraging the promoters of the Bill to increase the facilities for handling coal. The chairman of what could be a future privatised industry says that they are eager and prepared to take an increasing amount of imported coal, from 30 million tonnes up to even 50 million tonnes. That is their preference, rather than using indigenously produced coal. We have a major national asset of millions of tonnes of coal reserves that could be mined in this country. One must balance mining that coal with the consequences of not mining it.
Importing 30 million tonnes of coal, as outlined by the chairman of the CEGB, Lord Marshall, would have devastating consequences beyond the coal mining industry. It would probably increase the number of unemployed by nearly 80,000, including miners, at a cost


to the nation of over £500 million in unemployment benefit alone. That would be the consequence of a preference for coal from South Africa and other countries, costing the taxpayer over £500 million. There would be an estimated 47,000 redundancies in the mining industry, costing the Exchequer well over £1 billion. Those matters must be taken into account by the House before it gives a Second Reading to the Bill and the Bills consequential upon it.
Recently the Government announced the devastating balance of payments figures. We shall increase the problem by a minimum of an estimated £1 billion by importing 30 million tonnes of coal.

Mr. Bill Michie: My hon. Friend is giving realistic figures for where the economy is at present, with the imbalance of payments and the problem with imports and exports, yet we are now at the mercy of foreign competitors in respect of engineering steels, for which we argued the same case in the House. The Government have still not learnt their lesson and will do the same for coal.

Mr. Buckley: I thank my hon. Friend for his intervention. He is following my train of thought on the economic argument.
Speeches have been made mainly by hon. Members representing mining constituencies because of the obvious and glaring effect that the passing of the Bill will have on their constituencies.

Mr. Illsley: Will my hon. Friend reflect on the possibility that nuclear waste and materials could come through the port facilities?

Mr. Buckley: I thank my hon. Friend for his intervention. He made quite a few points in his speech about the byelaws that the Bill will give the company. A chemical company could be given the authority to dispose of substances. That leaves open the inclusion of nuclear waste. I understand that the hon. Member for Brigg and Cleethorpes was opposed to such waste being disposed of in his constituency.

Mr. Hinchliffe: My hon. Friend makes an important point about waste. Is he aware that, of the 60,000 tonnes of special waste—dangerous substances—that the United Kingdom imports from Europe because European countries cannot dispose of them due to environmental regulations, 20,000 tonnes comes up the Humber? Is he further aware that it is highly likely that these port facilities will be used to increase even further the import of such waste?

Mr. Meale: Is my hon. Friend aware that Conservative Members who have not been present for the debate are now streaming into the Chamber to force a vote rather than to allow hon. Members to continue arguing these points?

Mr. Buckley: That is a valid point. I have noticed the sudden increase in attendance in the Chamber.
Recently, in his speech to the Institution of Mining Engineers, the Secretary of State for Energy pointed out that the Government supported British Coal. He claimed that £9,000 billion had been invested in British Coal——

Mr. Michael Brown: rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The House divided: Ayes 165, Noes 114.

Division No. 394]
[9.56 pm


AYES


Allason, Rupert
Howarth, Alan (Strat'd-on-A)


Arnold, Jacques (Gravesham)
Howarth, G. (Cannock &amp; B'wd)


Ashdown, Paddy
Howells, Geraint


Atkinson, David
Hunt, David (Wirral W)


Baker, Nicholas (Dorset N)
Hunter, Andrew


Baldry, Tony
Janman, Tim


Banks, Robert (Harrogate)
Jessel, Toby


Beaumont-Dark, Anthony
Jones, Robert B (Herts W)


Bellingham, Henry
Jopling, Rt Hon Michael


Bennett, Nicholas (Pembroke)
King, Roger (B'ham N'thfield)


Benyon,W.
Kirkhope, Timothy


Biggs-Davison, Sir John
Knapman, Roger


Blackburn, Dr John G.
Knight, Greg (Derby North)


Blaker, Rt Hon Sir Peter
Lang, Ian


Boscawen, Hon Robert
Lawrence, Ivan


Boswell, Tim
Leigh, Edward (Gainsbor'gh)


Bowden, A (Brighton K'pto'n)
Lennox-Boyd, Hon Mark


Bowis, John
Lightbown, David


Braine, Rt Hon Sir Bernard
Lilley, Peter


Brooke, Rt Hon Peter
Lloyd, Peter (Fareham)


Brown, Michael (Brigg &amp; Cl't's)
Lyell, Sir Nicholas


Browne, John (Winchester)
Maclean, David


Bruce, Ian (Dorset South)
McNair-Wilson, Sir Michael


Buck, Sir Antony
Malins, Humfrey


Budgen, Nicholas
Mans, Keith


Butler, Chris
Martin, David (Portsmouth S)


Butterfill, John
Maude, Hon Francis


Campbell, Menzies (Fife NE)
Mayhew, Rt Hon Sir Patrick


Carlile, Alex (Mont'g)
Michie, Mrs Ray (Arg'l &amp; Bute)


Carlisle, Kenneth (Lincoln)
Miller, Sir Hal


Carttiss, Michael
Mills, Iain


Cash, William
Miscampbell, Norman


Chalker, Rt Hon Mrs Lynda
Mitchell, David (Hants NW)


Chapman, Sydney
Moate, Roger


Chope, Christopher
Moss, Malcolm


Clark, Dr Michael (Rochford)
Moynihan, Hon Colin


Clark, Sir W. (Croydon S)
Neubert, Michael


Clarke, Rt Hon K. (Rushcliffe)
Newton, Rt Hon Tony


Conway, Derek
Nicholls, Patrick


Cope, Rt Hon John
Onslow, Rt Hon Cranley


Couchman, James
Paice, James


Critchley, Julian
Parkinson, Rt Hon Cecil


Davies, Q. (Stamf'd &amp; Spald'g)
Peacock, Mrs Elizabeth


Day, Stephen
Porter, David (Waveney)


Devlin, Tim
Portillo, Michael


Dorrell, Stephen
Price, Sir David


Douglas-Hamilton, Lord James
Redwood, John


Dunn, Bob
Rhodes James, Robert


Durant, Tony
Riddick, Graham


Eggar, Tim
Roe, Mrs Marion


Emery, Sir Peter
Rossi, Sir Hugh


Fallon, Michael
Ryder, Richard


Favell, Tony
Sackville, Hon Tom


Field, Barry (Isle of Wight)
Sayeed, Jonathan


Fookes, Miss Janet
Shaw, David (Dover)


Forman, Nigel
Shaw, Sir Giles (Pudsey)


Fox, Sir Marcus
Shaw, Sir Michael (Scarb')


Franks, Cecil
Shersby, Michael


French, Douglas
Sims, Roger


Garel-Jones, Tristan
Skeet, Sir Trevor


Gill, Christopher
Smith, Tim (Beaconsfield)


Goodson-Wickes, Dr Charles
Speed, Keith


Gorman, Mrs Teresa
Speller, Tony


Gow, Ian
Steen, Anthony


Grant, Sir Anthony (CambsSW)
Stewart, Allan (Eastwood)


Griffiths, Sir Eldon (Bury St E')
Stradling Thomas, Sir John


Ground, Patrick
Taylor, Ian (Esher)


Gummer, Rt Hon John Selwyn
Taylor, John M (Solihull)


Harris, David
Taylor, Matthew (Truro)


Hayward, Robert
Thatcher, Rt Hon Margaret


Hicks, Robert (Cornwall SE)
Thompson, D. (Calder Valley)


Holt, Richard
Thompson, Patrick (Norwich N)






Thorne, Neil
Whitney, Ray


Thurnham, Peter
Widdecombe, Ann


Tredinnick, David
Wiggin, Jerry


Trippier, David
Wilkinson, John


Twinn, Dr Ian
Wilshire, David


Waddington, Rt Hon David
Winterton, Mrs Ann


Wakeham, Rt Hon John
Winterton, Nicholas


Walker, Bill (T'side North)
Wood, Timothy


Waller, Gary



Ward, John
Tellers for the Ayes:


Watts, John
Mr. Eric Forth and


Wells, Bowen
Mr. David Davis.


Wheeler, John





NOES


Abbott, Ms Diane
Latham, Michael


Alexander, Richard
Leadbitter, Ted


Allen, Graham
Lester, Jim (Broxtowe)


Armstrong, Hilary
Lloyd, Tony (Stretford)


Ashton, Joe
Lofthouse, Geoffrey


Banks, Tony (Newham NW)
McAllion, John


Barnes, Harry (Derbyshire NE)
Macdonald, Calum A.


Battle, John
McKay, Allen (Barnsley West)


Bennett, A. F. (D'nt'n &amp; R'dish)
McKelvey, William


Bermingham, Gerald
McLeish, Henry


Blunkett, David
McLoughlin, Patrick


Boateng, Paul
McWilliam, John


Boyes, Roland
Madden, Max


Bradley, Keith
Mahon, Mrs Alice


Brandon-Bravo, Martin
Marek, Dr John


Brown, Nicholas (Newcastle E)
Maxton, John


Buchan, Norman
Meale, Alan


Buckley, George J.
Michael, Alun


Caborn, Richard
Michie, Bill (Sheffield Heeley)


Callaghan, Jim
Millan, Rt Hon Bruce


Campbell, Ron (Blyth Valley)
Mitchell, Andrew (Gedling)


Campbell-Savours, D. N.
Mitchell, Austin (G't Grimsby)


Clark, Dr David (S Shields)
Moonie, Dr Lewis


Clay, Bob
Morgan, Rhodri


Clelland, David
Morris, Rt Hon A. (W'shawe)


Clwyd, Mrs Ann
Morris, M (N'hampton S)


Cohen, Harry
Mowlam, Marjorie


Cousins, Jim
Murphy, Paul


Cummings, John
Nellist, Dave


Dalyell, Tam
Oakes, Rt Hon Gordon


Dewar, Donald
O'Brien, William


Dixon, Don
O'Neill, Martin


Doran, Frank
Orme, Rt Hon Stanley


Dunnachie, Jimmy
Patchett, Terry


Dunwoody, Hon Mrs Gwyneth
Pendry, Tom


Eadie, Alexander
Powell, Ray (Ogmore)


Eastham, Ken
Prescott, John


Evans, John (St Helens N)
Redmond, Martin


Faulds, Andrew
Rees, Rt Hon Merlyn


Flynn, Paul
Robinson, Geoffrey


Foster, Derek
Rogers, Allan


Fraser, John
Ross, Ernie (Dundee W)


Fyfe, Maria
Rowlands, Ted


Garrett, Ted (Wallsend)
Skinner, Dennis


Golding, Mrs Llin
Smith, Andrew (Oxford E)


Grocott, Bruce
Steinberg, Gerry


Haynes, Frank
Stewart, Andy (Sherwood)


Hinchliffe, David
Strang, Gavin


Hogg, N. (C'nauld &amp; Kilsyth)
Turner, Dennis


Home Robertson, John
Wall, Pat


Hood, Jimmy
Wareing, Robert N.


Howarth, George (Knowsley N)
Williams, Alan W. (Carm'then)


Hoyle, Doug
Wilson, Brian


Hughes, John (Coventry NE)
Wise, Mrs Audrey


Hughes, Robert (Aberdeen N)
Worthington, Tony


Hughes, Sean (Knowsley S)



Illsley, Eric
Tellers for the Noes:


Ingram, Adam
Mr. Michael Welsh and


Knowles, Michael
Mr. Kevin Barron.

Question accordingly agreed to.

Question put accordingly, That the Bill be now read a Second time:—

The House divided: Ayes 156, Noes 120.

Division No. 395]
[10.9 pm


AYES


Allason, Rupert
Lang, Ian


Arnold, Jacques (Gravesham)
Lawrence, Ivan


Atkinson, David
Leigh, Edward (Gainsbor'gh)


Baker, Nicholas (Dorset N)
Lennox-Boyd, Hon Mark


Baldry, Tony
Lightbown, David


Banks, Robert (Harrogate)
Lilley, Peter


Beaumont-Dark, Anthony
Lloyd, Sir Ian (Havant)


Bellingham, Henry
Lloyd, Peter (Fareham)


Bennett, Nicholas (Pembroke)
Lyell, Sir Nicholas


Benyon, W.
Maclean, David


Biggs-Davison, Sir John
McNair-Wilson, Sir Michael


Blackburn, Dr John G.
Major, Rt Hon John


Blaker, Rt Hon Sir Peter
Malins, Humfrey


Boscawen, Hon Robert
Mans, Keith


Boswell, Tim
Martin, David (Portsmouth S)


Bottomley, Mrs Virginia
Maude, Hon Francis


Bowden, A (Brighton K'pto'n)
Mayhew, Rt Hon Sir Patrick


Bowis, John
Miller, Sir Hal


Braine, Rt Hon Sir Bernard
Mills, Iain


Brooke, Rt Hon Peter
Miscampbell, Norman


Brown, Michael (Brigg S Cl't's)
Mitchell, David (Hants NW)


Browne, John (Winchester)
Moate, Roger


Bruce, Ian (Dorset South)
Moss, Malcolm


Buck, Sir Antony
Moynihan, Hon Colin


Budgen, Nicholas
Neubert, Michael


Butler, Chris
Newton, Rt Hon Tony


Butterfill, John
Nicholls, Patrick


Carlisle, Kenneth (Lincoln)
Onslow, Rt Hon Cranley


Carttiss, Michael
Paice, James


Chalker, Rt Hon Mrs Lynda
Parkinson, Rt Hon Cecil


Chapman, Sydney
Peacock, Mrs Elizabeth


Chope, Christopher
Porter, David (Waveney)


Clark, Dr Michael (Rochford)
Portillo, Michael


Clark, Sir W. (Croydon S)
Price, Sir David


Conway, Derek
Redwood, John


Cope, Rt Hon John
Rhodes James, Robert


Couchman, James
Riddick, Graham


Critchley, Julian
Roe, Mrs Marion


Davies, Q. (Stamf'd &amp; Spald'g)
Rossi, Sir Hugh


Day, Stephen
Ryder, Richard


Dorrell, Stephen
Sackville, Hon Tom


Douglas-Hamilton, Lord James
Sayeed, Jonathan


Dunn, Bob
Shaw, David (Dover)


Durant, Tony
Shaw, Sir Giles (Pudsey)


Emery, Sir Peter
Shaw, Sir Michael (Scarb')


Fallon, Michael
Shersby, Michael


Favell, Tony
Sims, Roger


Field, Barry (Isle of Wight)
Skeet, Sir Trevor


Fookes, Miss Janet
Smith, Tim (Beaconsfield)


Forman, Nigel
Speed, Keith


Fox, Sir Marcus
Speller, Tony


Franks, Cecil
Steen, Anthony


French, Douglas
Stewart, Allan (Eastwood)


Garel-Jones, Tristan
Stradling Thomas, Sir John


Gill, Christopher
Taylor, Ian (Esher)


Goodson-Wickes, Dr Charles
Taylor, John M (Solihull)


Gorman, Mrs Teresa
Thatcher, Rt Hon Margaret


Gow, Ian
Thompson, D. (Calder Valley)


Grant, Sir Anthony (CambsSW)
Thompson, Patrick (Norwich N)


Griffiths, Sir Eldon (Bury St E')
Thurnham, Peter


Ground, Patrick
Trippier, David


Gummer, Rt Hon John Selwyn
Twinn, Dr Ian


Harris, David
Waddington, Rt Hon David


Hayward, Robert
Wakeham, Rt Hon John


Holt, Richard
Walden, George


Howarth, Alan (Strat'd-on-A)
Walker, Bill (T'side North)


Howarth, G. (Cannock &amp; B'wd)
Waller, Gary


Hunt, David (Wirral W)
Ward, John


Hunter, Andrew
Watts, John


Janman, Tim
Wells, Bowen


Jessel, Toby
Wheeler, John


Jones, Robert B (Herts W)
Whitney, Ray


Jopling, Rt Hon Michael
Widdecombe, Ann


King, Roger (B'ham N'thfield)
Wiggin, Jerry


Kirkhope, Timothy
Wilkinson, John


Knapman, Roger
Wilshire, David


Knight, Greg (Derby North)
Winterton, Mrs Ann






Winterton, Nicholas
Tellers for the Ayes:


Wood, Timothy
Mr. Eric Forth and



Mr. David Davis.




NOES


Abbott, Ms Diane
Howarth, George (Knowsley N)


Alexander, Richard
Howells, Geraint


Allen, Graham
Hoyle, Doug


Armstrong, Hilary
Hughes, John (Coventry NE)


Ashdown, Paddy
Hughes, Robert (Aberdeen N)


Ashton, Joe
Hughes, Sean (Knowsley S)


Banks, Tony (Newham NW)
Illsley, Eric


Barnes, Harry (Derbyshire NE)
Ingram, Adam


Battle, John
Knowles, Michael


Bennett, A. F. (D'nt'n &amp; R'dish)
Latham, Michael


Bermingham, Gerald
Leadbitter, Ted


Blunkett, David
Leighton, Ron


Boateng, Paul
Lester, Jim (Broxtowe)


Boyes, Roland
Lloyd, Tony (Stretford)


Bradley, Keith
Lofthouse, Geoffrey


Brandon-Bravo, Martin
McAllion, John


Brown, Nicholas (Newcastle E)
Macdonald, Calum A.


Buchan, Norman
McKay, Allen (Barnsley West)


Buckley, George J.
McKelvey, William


Caborn, Richard
McLeish, Henry


Callaghan, Jim
McLoughlin, Patrick


Campbell, Menzies (Fife NE)
McWilliam, John


Campbell, Ron (Blyth Valley)
Madden, Max


Campbell-Savours, D. N.
Mahon, Mrs Alice


Carlile, Alex (Mont'g)
Marek, Dr John


Clark, Dr David (S Shields)
Maxton, John


Clay, Bob
Meale, Alan


Clelland, David
Michael, Alun


Clwyd, Mrs Ann
Michie, Bill (Sheffield Heeley)


Cohen, Harry
Michie, Mrs Ray (Arg'l &amp; Bute)


Cousins, Jim
Millan, Rt Hon Bruce


Cummings, John
Mitchell, Andrew (Gedling)


Dalyell, Tam
Mitchell, Austin (G't Grimsby)


Dewar, Donald
Moonie, Dr Lewis


Dixon, Don
Morgan, Rhodri


Doran, Frank
Morris, Rt Hon A. (W'shawe)


Dunnachie, Jimmy
Morris, M (N'hampton S)


Dunwoody, Hon Mrs Gwyneth
Mowlam, Marjorie


Eadie, Alexander
Murphy, Paul


Eastham, Ken
Nellist, Dave


Evans, John (St Helens N)
Oakes, Rt Hon Gordon


Faulds, Andrew
O'Brien, William


Flynn, Paul
O'Neill, Martin


Foster, Derek
Orme, Rt Hon Stanley


Fraser, John
Patchett, Terry


Fyfe, Maria
Pendry, Tom


Garrett, Ted (Wallsend)
Powell, Ray (Ogmore)


Golding, Mrs Llin
Prescott, John


Grocott, Bruce
Redmond, Martin


Haynes, Frank
Rees, Rt Hon Merlyn


Hinchliffe, David
Rogers, Allan


Hogg, N. (C'nauld &amp; Kilsyth)
Ross, Ernie (Dundee W)


Home Robertson, John
Rowlands, Ted


Hood, Jimmy
Skinner, Dennis





Smith, Andrew (Oxford E)
Williams, Alan W. (Carm'then)


Steinberg, Gerry
Wilson, Brian


Stewart, Andy (Sherwood)
Wise, Mrs Audrey


Strang, Gavin
Worthington, Tony


Taylor, Matthew (Truro)



Turner, Dennis
Tellers for the Noes:


Wall, Pat
Mr. Kevin Barron and


Wareing, Robert N.
Mr. Michael Welsh.

Question accordingly agreed to.

Bill read a Second time and referred to the Examiners of Petitions for Private Bills.

Mr. Skinner: On a point of order, Mr. Speaker. A substantial number of hon. Members took part in the Divisions on the closure and the principle of the Bill, including the Prime Minister. On previous occasions I have raised the question of the private Bill procedure and the fact that it is now being abused. At one time, private Bills were geographically constrained and hon. Members could serve on Committees without the fear being engendered that they might be tarnished by their activities. On Bills such as the North Killingholme Bill, which look after the interests of South Africa and big business, ensuring a turn-out of Cabinet Ministers, there cannot be an hon. Member on either side of the House who could be regarded as not being involved in the issue. Therefore, the private Bill procedure must be radically reformed.

Mr. Speaker: I think that I can help the hon. Gentleman. I share his concern, as does the House. A Committee is looking into the matter, and the hon. Gentleman's duty is to make his representations to it.

Mr. Tony Banks: Further to that point of order, Mr. Speaker. I am a member of that Committee and I must endorse the views expressed by my hon. Friend the Member for Bolsover (Mr. Skinner). I cannot see how it is possible for the Bill to proceed to its Committee stage. On previous Bills we have looked round for hon. Members on either side of the House who could deal with them in an objective and impartial fashion. On that basis, the North Killingholme Bill cannot be considered to be a genuinely private Bill, and I have no alternative but to recommend to the Committee tomorrow that the Bill should not be considered as a private Bill.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Electricity (Financial Provisions) (Scotland) Bill and the Legal Aid Bill [Lords], may be proceeded with, though opposed, until any hour.—[Mr. Dorrell.]

Orders of the Day — Electricity (Financial Provisions) (Scotland) Bill

Postponed proceeding on Question, That the clause be read a Second time, resumed.

Mr. Lang: When the debate was adjourned, I had been answering points raised by hon. Members on the treatment of debt. I had explained that the boards' debts were being fully serviced on a commercial basis.
Looking ahead to privatisation, I was about to say that the treatment of debt, like all other aspects of the capital structure of the industry, will be determined nearer the time of flotation in the light of a range of factors. Those might include market conditions, recent results and the trading prospects of the companies and the market's perception of them. It will be carefully designed to ensure a viable and robust industry while optimising the proceeds to the taxpayer.
The hon. Member for Edinburgh, Central (Mr. Darling) suggested that interest charges on existing debt might raise prices. I must disagree because the capital investment giving rise to interest charges will help to keep the industry modern and efficient and will secure a stable price base. The hon. Gentleman said that he had yet to see electricity prices reduce in real terms, but over the past six years electricity prices in Scotland have reduced in real terms by no less than 9 per cent.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) and the hon. Member for Edinburgh, Central asked about decommissioning costs. Provision is already being made for such costs, which must vary from time to time to take account of changing circumstances—for example, the change by British Nuclear Fuels Ltd. in the way in which it estimates decommissioning costs to bring them in line with the rest of the industry, or the SSEB's decision to end the Chapelcross contract, which led to the need for provision for costs to be made several years ahead.
The amount provided for long-term decommissioning of the SSEB's nuclear power stations in 1986–87 was £27 million, bringing total provision until the end of March of that year to £182·6 million. The industry will continue to make provision to meet those future costs. I assure the Committee that the borrowing anticipated under the increased limits proposed in the Bill will be mainly for capital investment.
The hon. Member for Glasgow, Maryhill (Mrs. Fyfe), who unfortunately is not present, referred to various consumer concerns about deteriorating service and rising prices.

Mr. Dewar: I almost blush as I rise, but it just occurred to me that I am remarkably ignorant about this matter. The Minister said that £27 million had been set aside for decommissioning costs and that this process has been going on for a number of years. Does he mean that a separate fund has been built up for that purpose or is this a notional figure to be set against future borrowing expenditure? I am not clear, put in those simple and almost prime ministerial terms, whether there is a separate bank account in which money has been put for this purpose.

Mr. Lang: These are liabilities provided for by assets in the companies' balance sheets.
Following privatisation, the industry will comprise two dynamic businesses that will be responsive to the requirements of their customers. They will be under commercial and competitive pressure from other fuels and electricity suppliers to deliver what the customer wants.

Mr. Dewar: I have no accountancy background and am struggling on the ABC of this matter. I take it from the Minister's remarks that there is no separate fund for decommissioning costs and that there is a notional provision on the balance sheet. Will he say what will happen under privatization? Is it a liability that will be inherited in that form by the successor company?

Mr. Lang: The structure of the company's balance sheet will be reconsidered at the time of privatisation. It will be the Government's purpose to ensure that the electricity boards are left with adequate cover to protect them against all foreseeable liabilities. If they were not protected, the companies could not be privatised.

Mr. Home Robertson: The Minister has explained to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) that the money does not exist and is only an idea on a balance sheet. He said that the Government will provide for all foreseeable liabilities, but will he say what is their view of what the foreseeable liability will be of decommissioning any nuclear installation? Have they worked out how they will do it and how much it will cost?

Mr. Lang: Most of the anticipated liabilities are covered by existing contracts, so a forward estimate is not required. When the SSEB decided to terminate the Chapelcross contract it had to make provision for decommissioning costs arising from that contract and provide for them in the year of termination of the contract.

Mr. Dalyell: On a point of order, Miss Boothroyd. Is it in order for hon. Members to carry on conversations at the Bar of the House when we are trying to listen to the debate? It is very distracting.

The Second Deputy Chairman: Hon. Members often carry on conversations at the Bar of the House. it has happened every day of my 15 years here. However, it would help if they did so in quieter voices which do not carry through the Chamber.

Mr. Bruce Millan: The Minister mentioned decommissioning contracts. I do not know what he means by that. As far as I am aware, there are no decommissioning contracts for Hunterston, for example. Perhaps there are. Is that what the Minister is saying? If so, it is news to the rest of the House.

Mr. Lang: I was referring to the contract between the SSEB and BNFL over the supply of electricity from Chapelcross. It is necessary for the industry to anticipate future decommissioning costs and to make provision for them. It will be necessary for the privatised companies to have that provision, too. Otherwise investors will wonder how to place a price upon the companies.
The hon. Members for Garscadden and for Linlithgow (Mr. Dalyell) referred to ownership of the grid and to the possible structure of the grid company. I draw their attention to the fact that the two companies in Scotland will be vertically integrated companies. In other words, they will each own and operate their own generating


systems, their own transmission systems and their own distribution systems. Each company will have wheeling rights across the other's transmission system.
In advancing his arguments about the English electricity industry, the hon. Member for Linlithgow seemed to forget that the problems that he foresees—which he may wish to pursue with my right hon. Friend the Secretary of State for Energy—are not problems that can be foreseen in the Scottish context. The hon. Gentleman referred to his visit to Southwark, and said that the grid was controlled from there. I have not been to Southwark, incidentally; the hon. Gentleman has the advantage in that respect. I urge him to visit Perth, which I have visited. It is from Perth that the North of Scotland Hydro-Electric Board controls the different sources of supplies of electricity for its area. I would also urge him to visit Kirkintilloch, where the sources of energy from the two boards are co-ordinated under the joint generating agreement. That is done under a merit order system, capitalising on the advantage of a wide range of diverse supply which allows the generation and supply of electricity at the most economic cost to the boards at any given time.
The hon. Member for Linlithgow referred to the danger of fragmentation and the possibility of blackouts. That is not a problem that we foresee in the Scottish context. The boards will continue to be responsible for the stability of the system in Scotland and there is no reason for any diminution of standards. The boards will be under an obligation to supply and the system will be overseen by the regulator, so the technical case that the hon. Member for Linlithgow made is taken fully into account in developing the structural details. In a vertically integrated system, which is what we contemplate, the companies will have full control of transmission and generation and hence will be able to ensure system stability. As the hon. Member for East Lothian (Mr. Home Robertson) said, the substantial surplus and diversity of capacity in Scotland makes the scenario painted by the hon. Member for Linlithgow highly improbable, to say the least.
The hon. Member for Garscadden referred to the remarks made this afternoon by my right hon. Friend the Secretary of State for Energy to the effect that no individual or group will have a controlling interest in the privatised companies. I am happy to reassure him that the same considerations will apply to the Scottish industry. No individual or group will have a controlling interest, and we are at present considering the most appropriate of the options open to us to achieve that.

Mr. Dewar: I await further developments with interest. The Minister said that no group or individual would have a controlling interest, but there is also the question of foreign ownership. The Minister has said that foreign shareholdings are not necessarily a bad thing, but even he conceded that foreign control—not only by one interest—might be dangerous, given that electricity is such a basic utility. Are we to have a limitation such as the 15 per cent. limit provided in the articles of association of Rolls-Royce? Will such a provision be introduced in this case?

Mr. Lang: As I said, the precise mechanism has not yet been decided upon, but the reference that I made to no individual or group having a controlling interest would apply equally in the foreign context.

Mr. Dewar: I am sorry to press the Minister, but there is a big distinction. There might be a mechanism whereby one group, one concert party or perhaps one individual, was limited as to the percentage of the equity that it or he could own. That would not necessarily prevent foreign ownership in a broader sense. In other words, a large percentage of the equity could pass abroad—perhaps to a number of different holdings. We seek protection against that, too.

Mr. Lang: It is certainly part of our purpose to ensure that foreign ownership could not develop, in the same way as we do not want any individual group or individual to secure a substantial proportion of the company. We shall seek to achieve that by using the appropriate mechanism, on which we have not yet decided.

Mr. Millan: Will the Minister clarify the question of foreign ownership? For example, in the case of Rolls-Royce it was possible to write those inhibitions into the articles of association as a national security interest was involved because of its importance to defence. In those circumstances, those inhibitions did not fall foul of the usual European Community rules. What is the position of the electricity industry in relation to the European Community? Is it permissible to interpret "foreign" for this purpose to include countries in the European Community?

Mr. Lang: Nearer the time when we come to prepare the legislation, we will certainly wish to ensure that nothing we do infringes any requirements of the European Community.
The hon. Member for Cunninghame, North (Mr. Wilson) raised the question of Hunterston, and argued that our manifesto did not contain a commitment to privatise the nuclear electricity industry. However, it did contain a commitment to privatise the electriciy industry, of which the nuclear component forms a large part. I cannot help wondering whether the hon. Gentleman told his constituents through the Largs and Millport Weekly News, when seeking election, that his party was committed to phasing out the nuclear generation industry in Scotland. The number of jobs that would have been lost in his constituency as a result of that commitment—to say nothing of the 30 per cent. rise in electricity prices, with their damaging consequences for manufacturing industry in Scotland—would have been considerable.
Privatisation will in no way reduce our concern for safety in the nuclear industry, because safety will continue to be governed by the Nuclear Installations Inspectorate, and any electricity company that failed to maintain the highest safety standard would not be allowed to retain its licence. That is a far stronger discipline on a private sector company than the profit motive.
The hon. Member for Midlothian (Mr. Eadie) mentioned the negotiations between the South of Scotland Electricity Board and British Coal. That point was also raised by the hon. Members for Garscadden, for East Lothian and for Edinburgh, East (Mr. Strang). The deadline for the conclusion of those negotiations is not 4 July, but 9 July.
The hon. Member for Midlothian referred to the remarks made by my right hon. Friend the Secretary of State for Energy this afternoon. I would only add that the parties are very close on price and on quantity, and there is no reason why a settlement satisfactory to both cannot be reached in the timescale they have set. Agreement can be struck only when the parties have reached agreement on all matters in dispute. I hope that they will soon be able to announce that agreement, but it is for them to announce it and not for me, my right hon. Friend the Secretary of State for Energy or my right hon. and learned Friend the Secretary of State for Scotland.

Mr. Eadie: Is the Minister telling us that the report that the Secretary of State is dissatisfied with the pace of the negotiations and that he will intervene is untrue?

Mr. Lang: The report that my right hon. Friend the Secretary of State will intervene is untrue. With regard to the pace of the negotiations, my right hon. and learned Friend is as anxious as anybody for a settlement, but it has to be settled by the parties involved. I want a successful Scottish coal industry, but that success must be earned by its being competitive. It cannot expect to ride on the back of a captive customer in the form of the electricity industry to which it would pass higher costs, which would in turn be passed on to the rest of manufacturing industry.

Mr. Dewar: It may not be a matter of enormous importance, but it is of some interest that The Scotsman today has a prominent story stating:
Mr. Rifkind is understood to have asked for a meeting in the early part of this week of senior British Coal executives.
That is either true or it is not true. As I understand it, the Minister is saying that that meeting will not take place and there has been no such request from the Secretary of State. Is that really so, because that does look like an authoritative leak?

Mr. Lang: My right hon. and learned Friend has asked the chairman of British Coal to meet him. I was about to come to that point. What they intend to talk about is not the negotiations between British Coal and the SSEB but the long-term future of the coal industry in Scotland. [Laughter.] I do not know why Opposition Members think that the long-term future of the coal industry in Scotland is such a joke. I regard it as something of considerable importance.

Mr. Home Robertson: The House is having some difficulty understanding what the Minister is trying to say. How can there possibly be a long-term future for the Scottish coal industry unless a successful agreement is concluded by the agreed deadline?

Mr. Lang: It is for my right hon. and learned Friend and the chairman of British Coal to decide what the issues are that affect the long-term future of the coal industry. My right hon. and learned Friend did not ask the chairman of British Coal to come and talk to him about these negotiations. He has made it clear, as I have done this evening, that they are a matter for the parties to the negotiations.
It is no coincidence that the output of the Scottish industry is at a record level now and that unemployment is falling dramatically. At the same time, Scotland has moved from the bottom to the top of the productivity league. Efficiency does not destroy jobs—it protects and

creates them. The Government are confident that, if it is competitive, coal will remain an important source of electricity generation.
The Scottish electricity industry has invested heavily in coal-fired capacity, and will undoubtedly wish to make the most of that investment to meet demand in Scotland and to take full advantage of the opportunity for the export of electricity to England and Wales.
I am sure that hon. Members are not in any doubt about the need for the increased borrowing facility provided for in the clause. I believe that the new limit is set at a reasonable level. It is most unlikely that borrowing will need to exceed it, but if for any reason the board's borrowings looked set to rise above the new limit, fresh legislation would be required and the House would have an opportunity at that time to review the position. I commend the clause to the Committee.

Mr. William McKelvey: I would not normally intervene in a debate at this stage, but the Minister, who has become a master of evasion, simply will not answer the question, so it will have to be asked again. That will give him the opportunity to have a rethink, so perhaps he will make a second winding-up speech in which he will answer what he has not answered so far.
I read, I think in the Sunday Mail, this weekend, with great interest, that the Minister is one of the few who are growing in stature. He is certainly growing in the art of evasion. As a master of ducking, dodging and weaving, he has been surpassed only once as far as I am aware—when Dick McTaggart won the gold medal for Scotland in the boxing ring. The Minister ought to think about going to the Olympics. He would win gold, silver and bronze when it came to the ducking, dodging, weaving and evading the question contest.
In the Scottish Grand Committee the Minister said that the most important reason why this should be the last time that the boards' borrowing limits will need to be increased is the Government's proposal to privatise the electricity supply industry. There is growing concern about the fact that, although we are aware of the Government's intention to privatise the Scottish industry, it is being done without a Green Paper or consultation because, we suspect, any consultative moves met a response that cast doubt on about proceeding along those lines. The Government therefore went straight into a White Paper without any consultations. The Minister has confessed that the only consultations that have taken place have been with the chairpersons of the boards. We have not heard whether they are in favour of privatisation.
The privatisation of the electricity supply industry is looming and that industry, together with its associate industries, will be the victims of Tory dogma. Yet again that dogma will be rammed down the throats of the Scottish people, but at no time have they voted for the privatisation and it is clear that they are opposed to it.
10.45 pm
There are enormous doubts about the practicability of privatisation. Nothing that the Minister has said will remove Scottish people's doubts, nor the doubts of those who are unlucky enough to be still working in that industry. My constituency was once famous for the mining industry, but it makes me sad to have to report that, as far as I am aware, there is not one working miner left in


Kilmarnock and Loudoun. There may be some employed in surface mining, but there is no working underground miner or working member of the National Union of Mineworkers left in my area. The last time that I spoke to former miners was on the sad occasion of the Barlow Clowes collapse—again something for which the Government should take some responsibility. Twenty former miners in my constituency have fallen foul of that collapse and have lost all their redundancy payments in that ill-fated venture.
The Minister has not attempted to say how the two units of the electricity industry that are to be set up on privatisation will operate. He has never described exactly how we will properly and safely monitor the nuclear industry. He should demonstrate to the Scottish people the interest that he is supposed to show in such matters. The Ministers have been obvious by their lack of talent in the negotiations that are presently under way between the SSEB and British Coal. They have stood aside and not attempted to intervene in a positive and helpful way.
It is a disgrace that the Ministers have given up any front of properly representing Scottish affairs. They have told the House that there is no possibility of setting up a Select Committee on Scottish Affairs to oversee the Department's activities. The Ministers have sunk into a morass and will not allow any investigation of their activities, no doubt because they are aware that they would not stand up to proper scrutiny. Evidence is growing that the businesses involved in the electricity supply industry and its possible privatisation have never been consulted. They are worried about that.
The Minister has said practically nothing about the cost of electricity, which is of importance to the punter—the domestic consumer. The Minister has said that the cost of electricity has gone down by 9 per cent. in real terms. However, he has not said whether that price reduction relates to domestic consumption, or whether it includes industrial consumers. I would be interested to know whether the price of electricity to the domestic consumer has gone down at all in real terms. When the Government flog off the electricity supply industry, what are the Minister's plans to write into the articles of association a guarantee that prices will be kept at their present level and will not rise above the rate of inflation on an annual basis?
What really worries the people of Scotland and their representatives is our experience since the privatisation of British Gas. The number of disconnections has increased by about 100 per cent. since privatisation. The new company applies a code of practice, but it should apply a code of acceptable conduct. It is not acceptable for privatised industries to disconnect the supplies of many people who have been pushed into poverty by the activities of the Government.

Mr. Norman Buchan: Is it not infinitely more serious when such draconian powers are given to private companies, which can then act almost as medieval bounty hunters? It was bad enough that public corporations had such powers, but to give them to private companies is disgraceful.

Mr. McKelvey: I agree that it is disgraceful to give such powers to a private company, and it is unforgivable to do

so without establishing a proper code of conduct. The Minister waves that away and says that the private industry will look after consumers' rights to fuel.
Since it is said that the private companies will run the electricity industry more efficiently, I presume that that will mean cheaper electricity for consumers. The Minister still has not explained how a monopoly can be competitive.
We must protect those who most need fuel. After the privatisation of British Gas—I hope that the figures for electricity will be in no way comparable—disconections increased from 36,000 in 1985 to 62,000 in 1987. The number of pre-payment meters installed dropped from 53,000 to 19,000. If the Scottish electricity boards adopt a similar posture after privatisation and argue that it is not profitable to supply pre-payment meters, more debts will be incurred and there will be a greater likelihood of disconnections. We in Scotland will not tolerate the sort of case that was outlined so dramatically by Jack Jones of an elderly lady found frozen to death over the stump of a candle which she had to use for heat since her electricity and gas had been cut off. That is not the sort of Scotland to which we look forward in the 21st century, and as representatives of the people of Scotland we will not accept it.
I am not a great believer in signs from a higher place, but it is extraordinary that when the Minister stood up to reply to the debate just before 7 o'clock, my watch stopped. The battery was drained of its last vestige of power. If ever a sign boded ill for the people of Scotland, that was it.

Mr. Lang: I am happy to reply briefly to the hon. Member for Kilmarnock and Loudoun (Mr. McKelvey). I hope he will forgive me if I do not repeat the points that I have already covered in earlier parts of the debate.
The hon. Gentleman raised one or two interesting points, and it might be helpful if I clarified what has happened about reductions in electricity prices in real terms over the past six years. On average, tariffs have fallen by 9 per cent., as I said. The hon. Gentleman asked about domestic tariffs. There has been a fall in domestic tariffs of 7·5 per cent. in real terms, which is still a worthwhile reduction for domestic customers.
The hon. Gentleman asked about the competitive position of privatised electricity. There would be competition by comparison. I make no apology for repeating that phrase, because it is justified. There will be comparisons by customers and their watchdog organisations, by industrial consumers, by shareholders and by the regulator. There would be competition in fuel sources, competition for major industrial customers and competition in exports to England. We are on the way, with our privatisation proposals, to creating two viable, robust, competitive, free-standing companies.
On consultation, the hon. Member for Kilmarnock and Loudoun said that there had been no Green Paper. That is true, but there was a White Paper and there were extensive consultations. In the preparation of our proposals we had consultations with the chairmen of the boards, and I have met the full boards of the north and south more than once. I have had a number of meetings with trade union representatives, and I shall have further meetings with them. The CBI Scotland, the Scottish Council (Development and Industry) and the Chemical Industries Association have been invited to offer their


views on the regulatory aspects of our proposals. I hope that that will serve to confirm and clarify to the hon. Gentleman that we are consulting widely. In due course we shall bring our proposals on privatisation before the House, and that will be the appropriate time to consider them further.

Question put and agreed to.

Clause 1 ordered to stand part of the Bill.

Clause 2 ordered to stand part of the Bill.

Bill reported, without amendment.

Order for Third Reading read.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Maclean.]

Mr. Dewar: My hon. Friend the Member for Kilmarnock and Loudoun (Mr. McKelvey) told the Minister that he was a master of evasion. That was generous. I prefer the theory that the Minister is master of nothing. His was an unsatisfactory performance. It was incomplete. He sounded fluent only when he was promoting party pamphlets on the alleged advantages of privatisation.
Many issues were raised—the costs of decommissioning, the capital reconstruction of the industry in

privatisation, the allocation of plant, the problem of foreign control. In almost every instance the Minister accepted that there was a problem, nodded in that direction and then passed on, giving us almost no information, except a bland assurance that something would be said at the appropriate time. The only time when I admired him was when he showed a certain disingenuous skill—on a grand scale—in dealing with the meeting that was to take place between the Secretary of State and British Coal officials. On that he was close to being misleading.
This is a woeful business, and the Minister's performance was dim and depressing. No one objects to the Bill. The Minister is right that no one would want to deny the boards this modest increase in their total borrowing requirement. I do not intend to do so, or to invite my hon. Friends to do so. However, I give the Minister notice that we shall worry and harass him and his colleagues on the many substantial points that were raised in tonight's debate. We shall not be satisfied with this endless prevarication, dodging of the issues and sorry pretence that at some stage the Minister will start to think out properly the answers to the problems that he should have considered long ago.

Question put and agreed to.

Bill accordingly read the Third time, and passed.

Orders of the Day — Legal Aid Bill [Lords]

As amended (in the Standing Committee), considered.

New Clause 2

DUTY TO DEAL WITH APPLICATIONS

'Where an application is made to the Legal Aid Board for Civil Legal Aid the Board shall have a duty to deal expeditiously with the application and if the Board have not within two months of the receipt of the application refused legal aid then it shall be deemed to have granted legal aid until such time as legal aid is revoked or amended or discharged.'.—[Mr. Fraser.]

Brought up, and read the First time.

Mr. John Fraser: I beg to move, That the clause be read a Second time.
The purpose of the new clause is to place a discipline on the Legal Aid Board to deal expeditiously with legal aid applications. We are concerned about the lapse of time at present between the making of an application for legal aid under the present procedures of the Law Society and the application being dealt with on its merits. We have reason to fear that if the experience in Scotland is anything to go by, the situation may get worse rather than better when the Legal Aid Board is in operation.
The problem is that when a prospective assisted person applies for legal aid, the lawyers—solicitors and counsel—can incur no expenditure until the legal aid certificate is granted. Any work that is done before the legal aid certificate is given cannot be recovered under the legal aid scheme even if subsequently it turns out that it would have been reasonable to do that work. The prospective legally aided person may suffer considerable disadvantage, at a time when he may be under the greatest of pressure from those who are bringing proceedings against him.
It might be an application for possession of premises, whether residential or business, or a claim for the recovery of a vehicle under a hire purchase agreement, but in all cases the prospective legally aided defendant could suffer great disadvantage, and even have judgment entered against him in default. The whole case can go disastrously wrong in the opening weeks, during which time the application for legal aid is still being considered by the Law Society or, under the Bill, by the Legal Aid Board.
We understand that in urgent cases it would be possible for an assisted person to apply for an emergency legal aid certificate, but we cannot contemplate a legal aid system where everybody goes for emergency civil aid certificates. The maximum period of about six months in some parts of the country—although I readily admit that the period of application for legal aid differs remarkably from one area to another—is far too long. We should do something in legislation to deal with the difficulties.
There are precedents for putting a limit on the amount of time that a public authority can be allowed to deal with an application. Under housing benefit regulations and law, the local authority is expected to determine an application for housing benefit within 14 days. I regret that in many areas local authorities do not act within that time, but Parliament placed that duty on them. I suppose that if

anybody sought to challenge a local authority on a delay in dealing with housing benefit, he would be able to rely on the time limit laid down by Parliament.
In planning legislation, we say that if a planning application is not decided by a local authority within two months, there is a direct appeal to the Minister under the appeals procedure. There are other precedents for saying that if an application has not been refused by a public authority within two months, the application is deemed to be granted. I give the example of the Caravan Sites and Control of Development Act 1960. If an application for a caravan site is not decided by a local authority within two months, the person who made the application is deemed to have the application granted.
In the new clause we propose that if a legal aid application is made to the Legal Aid Board and is not dealt with within two months, it is deemed by default to have granted the application. After all, that is the way that the courts work. If a summons is issued, it is possible for a plaintiff to obtain judgment by default, whether in the High Court or a county court. We may have legal aid applications where the prospective legally aided person finds that judgment is entered against him because of the delay. If a default system is good enough against a defendant, it should be good enough for somebody applying for legal aid.
I said that our fears were worsened by what has occurred in Scotland. A short letter from a practitioner to the Law Society of Scotland, dealing with problems in Scotland, which has a Legal Aid Board, states:
The Legal Aid Committee and you may be interested to know that in two cases at Stornoway Sheriff Court this week the learned Sheriff recalled lists because three and a half months was more than enough time for the Scottish Legal Aid Board to process an application for legal aid. In both cases the application for legal aid was made promptly and in one case in fact before the tabling diet.
Perhaps someone should tell the Legal Aid Board who seem unable or unprepared to meet the Sheriff's timetable.
If Sheriffs throughout the country take a similar view, solicitors and their clients are going to be faced with some very difficult decisions. I would be interested to know whether or not practitioners elsewhere are experiencing a similar attitude. It may be that our local faculty should be taking the matter up with the Sheriffs or the Sheriff Principals to educate them on the subject and I would appreciate your views.
That is what has happened in Scotland.
The Government should make boards disciplined and efficient through legislation. Administrative delays are disgraceful. Many of my constituents have been inconvenienced by long delays in issuing passports, immigration applications and applications for registration of United Kingdom citizenship. This is one area where we cannot afford delay. If legal aid is not granted within two months of an application being made, the applicant should be deemed to be legally aided until such time as the Legal Aid Board has a further look at the matter. It would then be free to revoke or amend the legal aid application, or to deal with it differently. It would mean that lawyers could get on with the case and the legally aided person would not suffer disadvantage early in the case when delay in granting legal aid may prove fatal to his interests.
For those reasons, and because there is no reason why legal aid applications should not be determined within two months, I commend the new clause.

Mr. Humfrey Malins: I shall be brief. I have some sympathy with the new clause. As a practising solicitor I have noticed a great difference in the


time between determining a criminal application for legal aid and a civil one. The system in criminal courts seems efficient as usually the application is granted on the same day that it is lodged. For civil applications the position is worse.
I practise in Surrey and our applications are lodged at Brighton. Civil legal aid applications tend to take between four and six months to be determined. I appreciate the burdens carried at the legal aid headquarters, but that is too slow. Often the interests of the applicant can be seriously prejudiced by such a delay.
I know that the Law Society can grant emergency certificates, but only when it is an emergency, and those grants are fairly sparing. Anything we can do to make the decision on an application for legal aid quicker would be to the good.
I have sympathy with the new clause. I hope that when my hon. and learned Friend the Solicitor-General replies he can assure me that the board will have at the front of its mind the need to deal with applications quickly. Certainly in the past my clients have been prejudiced. We all hope that in future the system can be smartened up.

The Solicitor-General (Sir Nicholas Lyell): Although the Government cannot accept the new clause, there is a measure of common ground in the form of a common desire—as expressed by my hon. Friend the Member for Croydon, North-West (Mr. Malins)—to ensure that legal aid applications are processed with proper expedition.
As the White Paper states, the Government will require the board to set appropriate targets for the handling of its business, and those targets will be carefully monitored. The aim, as the White Paper makes clear, must be to ensure that the needs and interests of all concerned—that of course means the applicant and the taxpayer—are properly balanced.
We share that common aim, but we cannot agree that it is wise for legal aid to be deemed to have been granted if an application has not been dealt with within two months. The House will remember that there are two sides to the matter. There is the duty on the applicant, and the duty currently on the Law Society—in future, on the board—to process the application. If a system operated under which legal aid were deemed to have been granted within two months, there would be a positive encouragement for applicants often to be less than co-operative in answering requests for supplementary information. A solicitor who submits an inadequately completed application form, or a client who is unwilling to co-operate in the assessment of his means, could find himself the one to reap the reward by obtaining legal aid by default, while someone more co-operative might experience more trouble, to no better advantage.
The present system is to be continued under the provisions of the Bill. It provides for legal aid to be granted immediately where there is a genuine and real need for work to be done urgently. That seems to us the best way to ensure that emergencies—as mentioned by my hon. Friend the Member for Croydon, North-West—are properly provided for.
I return to the subject with which I began. We have made it clear in the White Paper that appropriate targets are to be set for the handling of the board's business, and they are to be monitored. We believe that that is the best way in which to overcome a problem which I accept must be overcome by one means or another.

Mr. Fraser: I am not sure that that is satisfactory. I know that the Solicitor-General says that the new clause would put a premium on the sending in of inadequate legal aid applications, but that could be solved very simply. if inadequate information was supplied by the applicant, the board could easily have the option of refusing the application. That is exactly what happens with immigration applications. If an applicant does not reply to the questions put by Lunar house, the application is refused on grounds of non-co-operation. There is a precedent for dealing with non-co-operative applicants.
I simply cannot understand what happens to the applications mentioned by my neighbour, the hon. Member for Croydon, North-West (Mr. Malins), during a period of six months. The process sometimes takes six months even when the applicant is in receipt of social security or income support, and therefore no means-testing arises. Where does the application remain for that time? Does it go into a pending tray? If so, it must be one of massive proportions.
I realise that it is not easy to set absolute time limits, but there must be some tougher target for the board to meet. In some parts of the country legal aid applications are dealt with extremely expeditiously. Letters are replied to within two or three days. In other parts, particularly in London—the hon. Member for Croydon, North-West mentioned Surrey as well—it takes six months. That simply is not good enough.
We should like the Legal Aid Board to be virtually instructed to have a target period, perhaps about two months, and certainly no longer. That would provide some means for us to come back and harry the Solicitor-General and the board if the targets were not met. Perhaps the hon. and learned Gentleman could put some target on the table that might act as a guideline for the future.

The Solicitor-General: I hope that it will assist the hon. Gentleman, even if it does not satisfy him fully, if I repeat that the Government will require the board to set appropriate targets for the handling of its business—I am not prepared to say that the appropriate target should be exactly two months in any particular area—and that those targets will be monitored. Subject to the question of a time limit, I think that that is the objective that the hon. Gentleman and the House as a whole wish to achieve. I commend that, rather than the new clause, as the proper way to proceed.

Question put and negatived.

Clause 3

THE LEGAL AID BOARD

Mr. Fraser: I beg to move amendment No. 13, in page 3, line 19, leave out 'two' and insert 'three'.
This amendment will not detain us long. The Law Society has suggested that there should be three solicitors on the Legal Aid Board, as opposed to the two mentioned in the Bill. I should make it clear that I am not anxious to see a large number of places on the board pre-empted by lawyers. It is right that there should be a balance. We argued in Committee that there should be a balance between consumers and providers of the service, and a reasonable spread of membership by gender and by race. I am in no sense anxious to see the board monopolised by


lawyers. On the other hand, 17 places are available for appointment. I understand that at present the basic number of solicitors to be appointed is two, and two barristers.
Once again, we can learn from the Scottish experience. I am told that the Scottish Legal Aid Board includes two solicitors and two barristers, and that the remaining 10 members are non-lawyers, mainly accountants. I am further advised that that has caused considerable problems because of the number of issues that the Scottish board considers to have a legal content and on which the Act requires that the board must be satisfied in a particular respect. In practice, it falls to the lawyer members of the board to ensure that those requirements are satisfied. Account should be taken of that experience to ensure that similar problems do not arise in England and Wales.
It is thus mainly for reasons of practicality that I suggest a modest increase in the number of solicitor appointees from two to three. Solicitors have been largely responsible for the management of legal aid in this country since the 1948 Act, so there is no shortage of people well experienced in the administration of the system. I am sure that the Government could accommodate the amendment without disturbing the balance of the board and the spread of interests that we wish it to include.

The Solicitor-General: In resisting the amendment, I repeat, first, as I said on Second Reading, that the Government are extremely grateful to the Law Society for its handling of legal aid over the past 40 years, and I fully accept that there are many solicitors who are extremely expert on the subject.
I hope that it will be of comfort both to the hon. Gentleman and to the Law Society if I emphasise that the Bill provides, not merely that there shall be two solicitors on the board, but that there shall be "at least" two solicitors, so there is absolutely nothing to prevent the appointment of more solicitors, or, indeed, more barristers or accountants, if that seems desirable. The Bill provides that there shall be at least four lawyers—two barristers and two solicitors—and I emphasise the words "at least".
I hope that in my response I have highlighted the key point and satisfied the Law Society that its interests can be fully met if it appears desirable to do so.

Amendment negatived.

Clause 8

SCOPE OF THIS PART

Mr. Fraser: I beg to move amendment No. 16, in page 6, line 40, leave out subsections (3) and (4).
The amendment would delete the arrangements that the Government propose for placing contracts for the provision of advice and assistance which, in practice, have the effect of excluding people from access to solicitors' advice under the green form advice scheme. The Government's arrangements would prevent people of moderate means from having choice and possibly from receiving any advice. If, in a fairly remote area, the Government chose to use a voluntary agency—the citizens advice bureau—for the giving of advice, problems of travel and of getting access to the advice centre at the appropriate times might rule out access to the advice.
The Government have still not spelled out exactly what is to be contracted out and excluded from access under the green form scheme. We know that they have been contemplating the exclusion of housing rights under social security legislation and immigration advice and that they have certainly decided upon the exclusion of advice on conveyancing of wills, even though there are a small number of cases in which advice on those matters might be useful. We know that the most likely candidates for contracting out advice are the citizens advice bureaux or other non-lawyer agencies. We cannot be certain about which subjects will be contracted out or to whom they will be contracted out.
In some ways, the Lord Chancellor is like Father Christmas—not because he wears a wig and red robes or because he gives away presents, because that is certainly not in his mind with the Bill, but because he gives out parcels that will not be opened until at least 25 December, and probably not until late next year. The problem about the Bill is that it is full of parcels that must not be opened and things that one must discover after it becomes law.
We do not like the contracting-out provisions, because they are likely to provide a second-class service for some people seeking advice. They are likely to restrict choice and to confer a monopoly in some areas. The provisions are likely to exclude advice from lawyers on important matters, such as housing and immigration, which are complicated parts of law. We dislike the sealed packet approach to law making contained in the Bill.
The very least that we want on Report is a definitive statement of the Government's intentions on contracting out so that, when the Bill becomes law, we shall at least know to which agencies work is likely to be offered and those subjects on which the Government intend to exclude solicitors' advice.
On matters of principle and matters concerning the basic rights of people to get advice affecting their future and livelihood, it is wrong that there should be the possibility of a Bill with blank spaces—the sealed packets that are to be opened once the Bill becomes law. I hope that the Solicitor-General will assuage the fears of many people about the contracting-out provisions and the exclusion of green form advice by telling us how limited will be the approach of the board and the Government to contracting out when the Bill becomes law.

Mr. Alex Carlile: I ask the Solicitor-General and the Government to bear in mind that there is a legal system outside the metropolis and the large cities. In dealing with problems of contracting out and deciding how to approach this part of the Bill, it is important to bear in mind the structure of the legal system, especially in rural areas. A wide range of legal services are provided in constituencies such as mine and that of my hon. Friend the Member for Truro (Mr. Taylor).
The way that the system operates is wholly dependent upon private firms of solicitors. People go to the solicitors with all sorts of problems, ranging from complex probate issues through minor pavement accidents to criminal cases. The solicitor is generally competent to deal with most of the work. If he cannot deal with the work, and does not feel able to solve the client's problems, he goes to counsel for advice, or occasionally turns to another solicitor who deals with a specialist subject. The effect is that a reasonably full range of legal services is available in an area like my constituency.
We fear, as do organisations such as my local citizens advice bureau, that if contracting out occurs, and affects small areas, some small firms of solicitors will go out of business. If they go out of business, there will be a reduction in choice available to those who need legal advice. In a rural area, people tend to know all about the choices available for legal advice. As I am sure that the Solicitor-General will know, legal advice is very much a horses-for-courses matter, and the client in rural areas tends to know, or can find out quickly, which horse is appropriate for which course. In such an area, there is usually some horse that can be ridden on almost any legal course, and past every legal obstacle.
Legal services in rural areas need safeguarding. They are already in decline in some respects. I ask the Government to ensure that this safeguard is applied.

The Solicitor-General: I am glad that we have had this short debate, because it is important that people should be clear about what the Government have in mind. The first thing to realise is that this is an enabling Bill. Nothing has been decided as to whether any particular part of the law should be contracted out and thereafter excluded from the local solicitors in a particular area. It will be for the new Legal Aid Board to give its mind to those questions. The Bill provides an opportunity to offer a better service in particular instances to different parts of the country, not a second-class or more restrictive service.
All who have practised in the law realise that in some sectors those who are not lawyers can provide a high standard of expertise. The Government have frequently mentioned welfare benefit law in this context. When we debated this matter in Committee, I said that I remembered my days in the DHSS and the enormous expertise in this subject that was provided by the Child Poverty Action Group and the National Association of Citizens' Advice Bureaux in the King's Cross area of London. I do not think that any hon. Member would gainsay me on that.
We contemplate that the board will look to see how advice is or is not being given through the green form scheme in particular areas. It will see what tenders or offers it receives from advice-giving agencies or law centres, or even from local solicitors in a particular sector. For example, in some inner city area, or part of a rural area, an advice-giving agency may say, "We believe that we could provide as good as or a better service than the local solicitors in this particular branch of the law"—for example, welfare benefits. Then the Legal Aid Board will consider whether or not to invite tenders for contracts to provide that type of service in that particular area. It will be open to all corners to tender, but invitations to tender will probably go to those who seem most suitable, for practical, administrative reasons. The matter will then be canvassed and considered by the board, but it cannot go ahead until it has received the approval of the Lord Chancellor. Therefore, nothing will happen overnight or without careful consideration. When it seems sensible to the board that particular types of advice can best be given, for example, by an advice agency in a particular area, then and only then will that type of advice in that area be excluded from the local solicitors.

Mr. Alex Carlile: I am sure that the hon. and learned Gentleman would agree that over the years it has always been thought that the client, even if he is in receipt of legal aid, should have a choice of lawyer. Does he agree that his proposals remove that choice and therefore place the legally aided litigant, for the first time, in a different position from the private paying litigant?

The Solicitor-General: I am not sure that I agree. However, even if the hon. and learned Gentleman were right, what the legally aided client may lose by way of choice, he may more than gain by way of opportunity. For example, a citizens' advice bureau might provide a user-friendly, open and available service in welfare benefit law and make that sort of advice and guidance much more widely available to people in that area than it would ever be possible for local solicitors to do.

Mr. Paul Boateng: Let me put it to the hon. and learned Gentleman in another way from the experience that I have had practising as a lawyer in a citizens' advice bureau and in private practice. In private practice one often finds that while advising a client on a matrimonial matter, particularly in relation to the woman who has been deserted by her husband, issues of welfare law, tax and a whole range of other matters can arise. Is it feasible, or would it be desirable in such circumstances, for the solicitor to say, "I am terribly sorry, but I cannot assist you. You must go down the road to the local citizens' advice bureau, which is better equipped to do the job than I am"? That does not make sense. Does the Solicitor-General accept that we have fought a great battle on both sides of the profession over the past decade to equip lawyers to advise people on welfare law and on areas of law which, when I was studying, were regarded as being areas into which lawyers did not trespass? Will this not be a retrogressive step in terms of the service to the client and the education of our lawyers?

The Solicitor-General: The hon. Gentleman has given me an opportunity to explain more fully—I do not wish to do so at tedious length—what we have in mind.
The fact that an area of advice had been contracted out to an advice-giving agency need not necessarily, under the regulations that we are contemplating, prevent somebody who is already receiving advice in a general area, such as matrimonial law, from continuing to receive from that solicitor advice connected with the broad area of her divorce or family settlements. The regulations still have to be drafted. The details will come before the House in the precise regulations. As I have said, this is an enabling Bill. What the hon. Member for Brent, South (Mr. Boateng) has said can be taken into account during the drafting.
I do not believe that the hon. Member for Brent, South would argue that because that lawyer, who is already apprised of the problems of that client, might best deal with them, that should prevent us from looking ahead to what I believe is this imaginative and sensible new way of bringing legal advice to a wider audience than is ever likely to receive it from local solicitors. I hasten to say that we expect that the solicitors' profession will continue to be—perhaps for decades or for ever—the primary source of general legal advice in local areas. I hope that that is of comfort to the hon. and learned Member for Montgomery (Mr. Carlile).
The problems of country areas are different from those of inner-city areas. It may be for the board to consider whether in the early stages these ideas are more appropriate to the town or country. It may be found that people are receiving advice under the green form scheme on an inefficient and not cost-effective basis and that it is acceptable to local solicitors—although they would not be the ultimate judge—for an advice-giving agency to provide advice in an area. I do not think that solicitors or clients need be unduly anxious about this measure. The opportunity to contract out gives a chance for the provision of sensible and cost-effective legal advice to develop.

Mr. Menzies Campbell: If a person goes to a solicitor and is given negligent advice, it may give rise to an action for damages. Does the hon. and learned Gentleman's view of the regulations conceive of a person receiving negligent advice from one of the advice-giving bodies and being entitled to sue? If so, will people receiving advice from a citizens' advice bureau that they regard as negligent be able to sue the citizens' advice bureau?

The Solicitor-General: I understand the problem, and I do not believe that it is incapable of solution. The advice-giving agencies will be working under contract. Anyone offering advice, as the hon. and learned Gentleman will understand, is already liable to be sued if he gives negligent advice. That would probably be as true of a citizens' advice bureau if it overstepped the mark as of a member of our profession. Advice-giving agencies would be expected to insure against it and the contract would take account of that.
I have dealt with the amendment in some detail, and I stand by my position.

Amendment negatived.

Clause 13

COSTS OF SUCCESSFUL UNASSISTED PARTIES

Mr. Fraser: I beg to move amendment No. 17, in page 9, line 16, leave out from `(b)' to second 'the' in line 17.
We can probably deal with the amendment very briefly. The short point is that at present if an unassisted party has proceedings instituted against it and suffers severe financial hardship as a result of succeeding against a legally aided person, the court can make an order for the costs of the unassisted person to be paid out of legal aid funds. The one condition is that the proceedings must be instituted by the legally aided person. If they are instituted by the unassisted person, no award can be made out of public funds.
The Solicitor-General generously sent me an extract of a report into the operation of the arrangements for the costs of unassisted parties, and I thank him for his courtesy. The report says that few applications are made and little interest is shown in the way in which the law operates. I was somewhat surprised by that, given the interest taken in the matter by the Royal Institution of Chartered Surveyors.
Reading through the material supplied by the Solicitor-General, it seems that there would be a small risk to public expenditure by being even-handed about the costs of unassisted parties, whether they institute or defend

the proceedings. In the light of the findings before the Solicitor-General, I hope that he will accept the amendment.

The Solicitor-General: The hon. Member for Norwood (Mr. Fraser) put the argument so charmingly and gently that it might have seemed to slip through my armour. I hope that I will not seem over-armoured when I reply.
The point to highlight is that the amendment has curious deficiencies, because it relates only to advice by representation and not to legal aid. For that reason alone, it would be a strange amendment to accept.
Under the present system, if someone is sued by an assisted person, he can obtain his costs out of the legal aid fund if he is likely to suffer serious hardship as a result of the rule. I emphasise that the serious hardship test is nothing like as difficult to overcome as is widely believed by the public and by both halves of the profession, and I urge solicitors, especially, to examine on their clients' behalf whether they can exercise their rights more widely in cases in which they are sued by an assisted party.
The amendment would widen the provision much more than the hon. Member for Norwood realises. If it were accepted, both for advice by way of representation and for legal aid, it would give the opportunity for a large number of defendants—some of them limited companies and some of them with very substantial means—to obtain costs. That cannot be our highest priority. The report that I provided for the hon. Gentleman goes into the cases quite carefully. It is available to anyone who seeks a copy, and it makes the case for the status quo more strongly than is generally realised. There is always a matter of priority in legal aid.
The amendment does not embody a high priority, and we must therefore resist it.

Amendment negatived.

Clause 15

AVAILABILITY OF, AND PAYMENT FOR, REPRESENTATION UNDER THIS PART

Mr. Fraser: I beg to move amendment No. 25, in page 10, line 44, at end insert—
`(2A) Subject to subsection (6) below, representation shall always be granted to a child who is a party to the proceedings.'.
The amendment would ensure that legal aid was always granted in cases involving a child. We argued the case unsuccessfully in Committee. I advance it again because, in the light of recent events, we need to be especially careful to look after children's needs. I know that we have not yet had the published report on Cleveland, but there is nevertheless widespread concern about the rights of children in proceedings—not for damages for personal injury but involving wardship or custody.
Once a child has been made a party to proceedings there is an overwhelming case for that child to be separately represented. An entirely objective mind should be put on the case with a view to looking after the child's interests. I know that in many cases the supposed interests of the child will be represented by a local authority or other statutory authority or a parent. However, it seems to me that there is no substitute for ensuring that the child is separately represented. Under the amendment the child would have to be made a party to the proceedings to be granted legal aid, but once that had happened the child


—innocent and often unable to make a judgment for himself—would have entirely independent and separate representation, apart from the other parties involved. I am sure that anyone who thinks about the need for a child to have his case properly put without its being influenced by those with a proprietorial interest in him would accept that the case is well made out. The amendment would involve only a modest increase in public expenditure, and I therefore hope that the Minister will accept it.

The Solicitor-General: There is much common ground between us. The only reason why we resist the amendment is that in a number of cases it might result in injustice, whereas under the law as it stands the circumstances that the hon. Gentleman has outlined will almost certainly always result in legal aid being granted.
The effect of the amendment is to remove from the case of a child
who is a party to the proceedings
any consideration of the merits test.
It has always been an essential feature of legal aid, first, that the applicant for legal aid should have insufficient means to be able to carry on the case for himself and, secondly, that the applicant should have a meritorious case. That must, in principle, apply to children as much as to anyone else. A child who is made a party to a case is very unlikely to fail the merits test, so that in practice there is likely to be nothing standing in his way in obtaining legal aid. However, making it a matter of principle that a child should receive legal aid would create an opportunity to exploit the position of children, which could be very unfair to those who found themselves on the other side in the litigation. It is for that reason, which I am sure is not intended by the hon. Gentleman, rather than for any reason of denying children with meritorious cases legal aid that I must resist the amendment.

Mr. Ivan Lawrence: Is my hon. and learned Friend saying that children will be joined as parties just because there will be an obligation to give them legal aid? I do not follow the logic of what my hon. and learned Friend has said.

The Solicitor-General: I do not think that my hon. and learned Friend has seen how the amendment fits into the structure of the Bill; I suspect that that is his difficulty. It is proposed that children should be granted legal aid regardless of merit. I am sure that my hon. and learned Friend would not wish that, but would wish that any child with a meritorious case, who had not the means to be represented, should be granted legal aid. That is also our objective, and there we would find common ground. However, as I have explained, the amendment goes further and is contrary to principle. Consequently we must resist it.

Amendment negatived.

Clause 20

COMPETENT AUTHORITIES TO GRANT REPRESENTATION

The Solicitor-General: I beg to move amendment No. 1, in page 15, line 40, at end insert—

`(4A) The magistrates' court inquiring into an offence as examining justices is also competent, before it decides whether or not to commit the person for trial, as respects any proceedings before the Crown Court on his trial.'.
The amendment inserts in the Bill what is currently provided for under section 2(1) of the Legal Aid Act 1982. It allows magistrates courts to make only one legal aid order at committal proceedings, which will cover both those proceedings and the defendant's trial in the Crown court, should the magistrates court decide to commit him there.
Those "through" legal aid orders as they are known were introduced to assist early preparation of cases by solicitors and to enable counsel's advice to be taken early where necessary. That is advantageous to the solicitor and the client. It also assists the court, it reduces administrative work in the magistrates court, and preparation should lead to improvements in the reliability of the information supplied to the Crown court for listing purposes and reduce the number of wasteful late changes of plea.
For those reasons, the Government seek to retain the provision and I commend the amendment to the House.

Amendment agreed to.

Clause 23

REIMBURSEMENT OF PUBLIC FUNDS BY CONTRIBUTIONS

The Solicitor-General: I beg to move amendment No. 2, in page 19, line 1, leave out subsection (8).

Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to take Government amendments Nos. 3 to 11.

The Solicitor-General: These amendments are largely technical. They are drafting amendments designed to clarify the relationship between the costs provisions of this part of the Bill and those of part II of the Prosecution of Offences Act 1985, with particular reference to the treatment of contributions. The amendments remove what on further examination has been seen to be unnecessary duplication of the 1985 Act.
In relation to contributions, the amendments clarify both the proper area of operation of clause 23(9), which deals with repayment of contributions in particular circumstances, and the application of that subsection to the situation governed by clause 26, where green form costs are to be treated as part of the costs of representation under this part of the Bill. The amendments also ensure that, while the inter partes costs of an assisted person will not be reduced on account of any contribution, his contribution will not be included in his costs for the purposes of any central funds order.
That is clearly right, because where the court has power to order the remission or repayment of contribution to a successful assisted person, but where the court chooses not to exercise that discretion in the assisted person's favour—for example, where he is acquitted on a technicality or has failed to give notice of an alibi offence—it would be wrong for there to be any backdoor alternative method of discovery by means of any order from central funds. The availability of central funds to cover the assisted person's out-of-pocket expenses is, of course, unaffected by the amendments. I commend them to the House.

Amendment agreed to.

Amendments made: No. 3, in page 19, line 10, at end insert


`where sums due under the order for costs are paid to the Board or the Lord Chancellor under section 20(2) of the Prosecution of Offences Act 1985 (recovery regulations)—'.

No. 4, in page 19, line 11, leave out from 'sums' to `subsection' in line 12 and insert `so paid'.

No. 5, in page 19, line 14, leave out from 'sums' to `subsection' in line 15 and insert `so paid'.

No. 6, in page 19, line 17, leave out subsection (10) and insert—
'(10) References in subsection (9) above to the costs of representation include any charge or fee treated as part of those costs by section 26(2).'.—[The Solicitor-General.]

Clause 31

ACT NOT GENERALLY TO AFFECT POSITION OF LEGAL REPRESENTATIVES OR OTHER PARTIES

Amendment made: No. 7, in page 24, line 16, at end insert—
'(1A) Without prejudice to the generality of subsection (1)(b) above, for the purpose of determining the costs of a legally assisted person in pursuance of an order for costs or an agreement for costs in his favour (other than an order under Part II of the Prosecution of Offences Act 1985) the services of his solicitor and counsel shall be treated as having been provided otherwise than under this Act and his solicitor shall be treated as having paid counsel's fees.'.—[The Solicitor-General.]

Clause 34

REGULATION

Mr. Fraser: I beg to move amendment No. 18, in page 26, line 31, leave out clause 34.
This amendment brings us back to familiar arguments which took place in another place and in Committee. Although they are familiar, it is worth raising them again now.
The amendment would enable us to challenge two major changes in the legal aid system of remuneration which are regarded with great apprehension by legal aid practitioners, I believe with good cause.
The Government propose that the principle of fair remuneration for work reasonably and actually done is removed. At the moment, the principle of fair remuneration for criminal legal aid is written into legislation. The Bill takes it out. The taxing masters, who vet the bills put in by lawyers, are bound to have regard to the principle of fair remuneration, so for civil legal aid work the principle is incorporated in our law by implication, the taxation rules and the practice of courts. There is no getting round the fact that the Bill removes that principle. The Government cannot pretend otherwise.
The second major change is a new criterion which is being put in by the Bill. One of the factors that will determine the remuneration of legal aid practitioners is the cost to public funds. Together, the two changes mean that there could be a significant change in how legal aid practitioners are remunerated. Considerations of public expenditure are likely to have a much more severe effect on payments than the principle of fair remuneration.
We all recognise that there are not unlimited public funds with which to carry out a social or public service. It is a legitimate area of public debate how much public expenditure there ought to be, but we all recognise that

there is bound to be some limit to the amount of public expenditure available. If less money is made available for schools or house building, we will have fewer schools and, as has happened under this Government, fewer publicly provided homes.
Although it may have been done surreptitiously, Parliament has never approved the idea that when we restrict expenditure on homes, schools or hospitals, we reduce the pay of building workers, architects or teachers. We have never said that those who provide the service which is subsidised by the state should personally have to bear the brunt of public expenditure restraints.
Hitherto, we have said that a certain amount of money is available for a service, but as far as possible we have accepted the principle of paying the rate for the job. Here, for the first time, the legal aid practitioner is expected to bear and accept a factor in his or her pay which relates to public expenditure restraints. [Interruption.] It is difficult, Mr. Deputy Speaker, to put an argument when there is loud conversation at the far end of the Chamber.

Mr. Deputy Speaker: Order. I hope that hon. Members who are not taking part in the debate or listening to it will not disturb those who are.

Mr. Fraser: Although the principle of fair remuneration is built into the present system, there is evidence that more firms are giving away legal aid work than accepting it and that access to legal services is being denied as fewer people are prepared to take on lower-paid and less remunerative work.
If clause 34 is retained and the new criteria for remuneration regulations are written in, the position could become much worse. Clause 34 does not allow the Lord Chancellor to control and regulate legal aid remuneration. The Chancellor of the Exchequer is substituted for the Lord Chancellor and he determines the rate of remuneration for those who undertake legal aid work. As a result it would be possible for the Chancellor of the Exchequer or, more likely, the Treasury to starve the legal aid system so that it falls below a proper level of viability. Once that happens the legal aid system may collapse.
Presently the legal aid system faces a crisis for a number of reasons. First, legal aid rates, even under the present system, are regarded as too low. In addition, payment is delayed for far too long. Presently the system pays badly and slowly, even though the principle of fair remuneration is written into the system. The problem is especially acute with larger cases that involve High Court claims for the recovery of damages for personal injury and such like. It is true that remuneration for advice, for assistance and for the duty solicitor scheme is, on the whole, paid fairly promptly, and that is welcome.
Presently, remuneration for more expensive litigation is not very generous and the delays in payment place legal aid practitioners at a double disadvantage. In criminal work, where fees are fixed by the Lord Chancellor, the legal aid practitioners will get less than the comparable rate for private work. In civil cases, legal aid practitioners suffer long delays in payment for work.
Secondly, there is massive competition between those who take up legal aid work and those who are involved in the commercial and financial sectors of the law. Salaries in the private sector, even for new entrants, are high. There is a particular problem when the inner city, whether it is


London or elsewhere, is next to the financial centre. Recruitment of legal aid lawyers in such circumstances is now extremely difficult.
The third problem that faces the legal aid service is that solicitors are not being recruited in large enough numbers. The present rate of admissions to the solicitors' profession is 3,000 a year, but that will not be enough to staff it. Many of those who may apply for legal aid work will certainly drift into financial and commercial work. The universities and the polytechnics are not producing enough graduates to enter the profession. About 75 per cent. of those who become solicitors after Law Society examinations come from universities, but there is an acute shortage in the numbers recruited. The greater the recruitment problem, the fewer the people who will take up legal aid work. Given the demands placed upon the profession, there is shortage of entrants and, because of the difference in remuneration between private and legal aid work, there is double pressure on those who accept such work.

Mr. Lawrence: Is the hon. Gentleman's fear that the legal aid system will be wound down one reason why some solicitors are so anxious to extend their rights of audience in legal aid work in criminal trials?

Mr. Fraser: That may be so, but I shall not be tempted into that argument this evening. This is a debate not about the organisation of the profession, but about the remuneration of barristers and solicitors. Although I am rather better acquainted with solicitors than I am with barristers, I understand that almost exactly the same arguments apply to barristers as to solicitors. This is not the time to open a gulf between the the two branches of the profession. They have a common interest in proper remuneration for legal aid work.
12 midnight
The case for remunerating lawyers is not popular, but I am not arguing on behalf of lawyers; I am arguing on behalf of those for whom the service is provided. The worst thing that could happen is that, because of the changes in the regulations for remuneration of legal aid work, we shall finish up—there is a serious danger of this even now—with a first and second-class service. The changes proposed in the Bill will emphasise the trend and institutionalise a first and second-class service. That would abolish the principle that we all hold dear—that there should be equality before the law.
If the Government wish to assuage the anxieties of both branches of the profession, the least that the Solicitor-General could do tonight—of course, I hope that he will accept the amendment—is to reaffirm that the Lord Chancellor will stick to the principle of fair remuneration and resist as hard as he can the introduction of a principle that the remuneration of legal aid lawyers should be determined by public expenditure considerations. Even if the amendment is not accepted, such an assurance would go a long way towards assuaging the fears that have been expressed by members of both branches of the profession and by many commentators. There is a serious fear that the number of people undertaking legal aid work will diminish and that the pay differentials between legal aid and private work will become greater.
The Government must recognise the dangers that will be exacerbated by the fundamental changes in the Bill. I hope that, even at this late stage, they will give us a policy

statement and reassure those who are observing our proceedings that the principle of fair remuneration, which has existed since 1948, will continue.

The Solicitor-General: I am tempted to say,
He that hath ears to hear, let him hear.
We have debated fair remuneration at every stage of the Bill here and in another place. In Committee I was bold enough to say that I was confident that the Government and the Lord Chancellor were winning the argument. I remain absolutely confident of it, and may I state it again briefly?
Before I do so, I must say that we cannot accept the amendment, as the hon. Member for Norwood (Mr. Fraser) will understand. Technically, it would cut clause 34, and therefore all the regulation-making powers, out of the Bill. As this is an enabling Bill, that makes it a wrecking amendment. The hon. Gentleman did not move it as a wrecking amendment, and would not expect me to respond to it as such, but I shall answer the points made in debate, because they give us an opportunity to probe this important point which has caused much misplaced and unnecessary worry in the profession and which I hope I can assuage.
The legal aid legislation provides for fair remuneration for work properly and reasonably done. The words "fair remuneration" do not find a place in the Bill. What is in the Bill is a careful analysis of the ingredients that should be considered when one is deciding what is fair. My noble and learned Friend the Lord Chancellor has made it perfectly clear that he has every intention of being fair in the application of those principles, which are now set down, and those requirements, which are now enumerated in clause 34(9).
The hon. Member for Norwood suggested that it is difficult at present to recruit enough solicitors and barristers to do the work that is available to be done, particularly in criminal legal aid. There is a problem with criminal legal aid and it is recognised by the Lord Chancellor. It is being approached precisely in accordance with the principles set down in clause 34(9). The point being made on behalf of the solicitors—a study is about to be carried out to see whether it is a fair one—is that the general levels of criminal legal aid remuneration are not sufficient to meet their overheads. Paragraphs (a), (b) and (c) of clause 34(9) show that overheads are the very matters that the Lord Chancellor must take into account when he seeks to set proper levels of remuneration. Paragraph (a) deals with the time and skill that particular work requires; (b) deals with the general level of fee income arising in relation to that work; and (c) deals with the general level of expenses of barristers and solicitors that is attributable to that work. That constitutes overheads.
In accordance with the new principles set out in the Bill, the Law Society, together with the Lord Chancellor, has commissioned a well-known firm of chartered accountants, Touche Ross, to carry out a detailed study of the fee income and overheads of the firms of solicitors that have a substantial involvement in criminal legal aid. If I remember the details of the study correctly, about one in 10 of all such solicitors are to be visited and studied in detail to determine what their fee incomes and overheads are, and how the two match. I do not believe that anyone could devise a more sensible way for the Government and professions to inform themselves about the real problem that must be met.
There is at the moment a problem of demand exceeding supply in the legal profession. I am sure that all hon. Members could make their own analyses of the reasons for that, but there has, in any case, been a great expansion in demand for commercial lawyers. It probably has something to do with the flourishing economy of the country and the new requirements for regulation of the City and other activities. Because such work is highly paid, it is perhaps more attractive to young lawyers than criminal legal aid. But those who look to the future of criminal and civil legal aid in other areas, as the Government do, and want not a second class but a first class service to be provided for those who lack the means to pay for litigation themselves, can take heart from the provisions of the Bill——

Mr. Alex Carlile: Does the Solicitor-General accept that one of the practical tests that the profession will apply to the Government's earnest in this matter will be the speed with which fees are paid? Does he accept that there are unconscionable delays in paying counsel for civil and criminal legal aid and that they must come to an end? Some young barristers are virtually starving because they are not being paid for work that they have done.

The Solicitor-General: The hon. and learned Gentleman slightly spoilt his case with his last few words. We are conscious that legal aid fees should be paid within a reasonable time. The hon. and learned Gentleman will know that steps have been taken, particularly in relation to matrimonial work—such cases drag on for years—to improve the rate at which legal aid fees are paid and to provide for interim payments. A new scheme was agreed with the Bar many months ago and is now up and running, which is making a considerable difference to the income and well-being of those who carry out that important work. There is nothing to divide us in principle, but I should not like the world to get the impression in practice that matters are in a parlous state, because I genuinely believe that that is an exaggeration. I have just made inquiries of those who advise me in the House, and, with regard to criminal legal aid, I could not accept that delay was grave. Delay is probably slightly more of a problem in civil rather than criminal work, but we shall monitor and keep a careful eye on the matter, as I said in answer to an earlier debate.
I commend the enormous improvement that the carefully set out criteria to be found in clause 34(9) provide for the discovery and approval by the Lord Chancellor of proper levels of remuneration for legally aided work. It has been recognised by the hon. Member for Norwood (Mr. Fraser) that cost to public funds must be part of those criteria. No Government can responsibly fail to take account of the overall cost of the service that they provide, but, as I said in Committee, the legal aid service is demand-led. Those who read the Bill carefully will recognise, first, that the Government have a duty to provide that service, and, secondly, that they must take into account those criteria, including the overhead costs of fulfilling and providing the service. That is a great improvement on the present vague provision for fair remuneration, which has been said in the debate by the hon. Member for Norwood himself not to be providing a particularly satisfactory outcome over the years.
I commend the clause to the House as an improvement, not merely a change, on the present position. I hope that both halves of the profession will soon come to recognise it as such.

Amendment negatived.

Schedule 2

CIVIL PROCEEDINGS: SCOPE OF PART IV REPRESENTATION

Mr. Fraser: I beg to move amendment No. 20, in page 38, line 24 at end insert—
'7. An inquest, statutory enquiry, immigration appeal tribunal, social security commissioners, vaccine damage tribunal, and industrial tribunal where it is likely that the applicant would be substantially disadvantaged without legal representation.'.

Mr. Deputy Speaker: With this it will be convenient to take amendment No. 21, in page 38, line 27 leave out paragraph 1.

Mr. Fraser: There is a misdrafting in amendment No. 21, so I do not propose to discuss it.
Amendment No. 20 seeks at this late stage of the Bill to achieve a compromise over representation before tribunals. The matter was discussed at great length in Committee and in the other place.
There is now general agreement that representation should be available before a tribunal in cases in which the assisted person would otherwise be considerably or substantially disadvantaged as a result of not being represented. The Government have conceded that there should be representation in some cases before the social security commissioners and the Lands Tribunal, and the amendment seeks to extend the principle of representation before tribunals to industrial tribunals and inquests, where people might be particularly disadvantaged. Relatives of the deceased person might not be able to present the case properly themselves or put evidence to the test of cross-examination.
Complicated matters could arise before the immigration appeal tribunal. We are not suggesting legal aid before the adjudicator—we are modest in our demands—but we seek to make legal aid available before the immigration appeal tribunal where, under the regulations, the appeal can be only on a matter of law. We seek to extend the principle to other tribunals in which substantial issues are involved and where the assisted party would be substantially disadvantaged by not being granted legal aid. We are not suggesting any type of blanket representation. It would be within the power of the Legal Aid Board to set and define criteria by which the test of substantial disadvantage could be measured.
The Bill in part erodes the efficacy of the legal aid system. It enables the Lord Chancellor, at the discretion of the Treasury, to cut the cover of legal aid. The amendment provides a chance to extend the cover and to make advances, such as into vaccine damage tribunals, at a modest cost. I propose the amendment most reasonably. I have not given blanket approval to representations before tribunals, as I wish to achieve consensus this evening, and I hope that the Solicitor-General will respond in the same spirit.

The Solicitor-General: Even if I cannot accept the amendment, I hope that I shall respond constructively.
We have often debated this question of representation before tribunals, and rightly so. The House will be pleased to know that the Government have initiated research into the important question of the effectiveness of representation at tribunals. It will understand, and the hon. Gentleman well knows, that tribunals were often set up so that lay people could come before them with legal and quasi-legal problems and have the ingredients of their case teased out of them constructively by members of the tribunal. Tribunals dealing with legal matters are composed entirely of lawyers, and those dealing with a mixture of legal and lay matters of a combination of lawyers and lay people who have a deep understanding of the particular subject. They rightly see it as their duty to do justice and not to allow the litigant's case to go by default just because he or she may not be represented.
The research carried out by Queen Mary college, which we hope will report in the spring of 1989, seeks to discover how effective representation is before tribunals. It may be effective and desirable in some cases and superfluous in others. It will give us better guidance on the extent to which we should extend the right to legal aid before tribunals.
Full legal aid is already available, and has been for some time, for hearings before the Lands Tribunal, the employment appeals tribunal and the commons commissioners. Advice by representation was made available by the Government in 1982 for the mental health review tribunal and, in 1984, for prison disciplinary tribunals, so we have made some progress.
The Lord Chancellor has made it clear that when the opportunity for further progress arises—I make no bones about it: it is partly a matter of cost—representations to social security commissioners will be a high priority. Whether or not, and in which order, if it be right to do so, we should extend legal aid to statutory inquiries or inquests—which would be a broad advance—to immigration appeal tribunals—where the United Kingdom immigrants advisory service already provides help to applicants—to vaccine damage tribunals and to industrial tribunals is a matter for debate. It is better that it should be an informed debate once the results of the research are known.
Our answer must be that we shall look at this and take it by stages as the case develops and resources allow. I am sorry that I cannot accept the amendment, but the hon. Gentleman would not have expected me to agree to it in such blanket form. We have made progress in the past, we are conducting research into the matter and looking at it carefully at present, and we hope, as resources and the case allow, to make further progress in future.

Amendments negatived.

Schedule 4

AMENDMENTS OF THE LEGAL AID (SCOTLAND) ACT 1986

The Parliamentary Under-Secretary of State for Scotland (Lord James Douglas-Hamilton): I beg to move amendment No. 26, in page 42, line 5, leave out `4(2)(a)' and insert `4(2)'.

Mr. Deputy Speaker: With this we may take Government amendments Nos. 27 and 28.

Lord James Douglas-Hamilton: The first two amendments are drafting consequences of the third. The effect of the third is to widen the scope of the determinations that can be made under section 4(2)(c) of the Legal Aid (Scotland) Act 1986.
The need arises from steps that my right hon. and learned Friend the Secretary of State for Scotland is taking in consultation with the Scottish Legal Aid Board and the Law Society of Scotland to improve the administration of legal aid. He proposes to allow the board to make payments to solicitors who have urgent steps to take in proceedings on behalf of clients before a legal aid application can be determined. Where in due course no award of legal aid is made, he proposes to set stringent conditions for such payments—notably that the solicitor should satisfy the board that he had reasonable grounds for believing that the client was eligible for legal aid, and that the work charged was necessarily, reasonably and actually carried out.
The purpose is to remove the need for emergency certificates in a sizeable number of cases, and the Law Society of Scotland has offered full co-operation in securing a reduction in the emergency certificates based on the availability of this new discretion to the board. That co-operation is most welcome.
The amendment is the key to a major improvement in legal aid adminstration in Scotland, and I commend it to the House.

Mr. Donald Dewar: I know that the amendment is widely welcomed—although perhaps I should not use that phrase, as it relates to a pretty arcane and technical matter. It is, at least, welcomed in the profession, and I am grateful to the Minister.
There has been a good deal of trouble recently over emergency certificates. As I understand it, they have been used extremely widely, largely because of the on-going complaint of the profession that it is now not possible to persevere with preparations for a case until the legal aid certificate has been granted, because solicitors who do will not be paid for it. It is possible to be paid only after the certificate has been granted. Under the old system—before the Scottish Legal Aid Board appeared on the scene—it was possible, if the solicitor took the risk, to proceed with the work; and, if legal aid was granted, he was then paid retrospectively from the date on which the application was lodged.
There is one point on which I am not clear, although I have no doubt that the Minister will be able to help me. He has explained very courteously that it is now possible for the Scottish Legal Aid Board, on what he describes as "stringent conditions", to pay for work that is done if the solicitor can reasonably have expected that legal aid would be granted. But I was under the impression that even if it was granted, if the work was done before the date of the grant, he could not be paid for it. I may be becoming confused. Perhaps the Minister could clarify the point.
Let me put it another way. This is a concession to cover circumstances in which work is done and, to the solicitor's surprise, legal aid is not granted. In those circumstances, payment can be made. Let us assume for a moment that the work is done, and legal aid is then granted. Is that work covered as well?

Lord James Douglas-Hamilton: I am glad to reassure the hon. Gentleman. He obviously wishes to know what happens when urgent steps are taken by the solicitor and there is a grant of legal aid. The grant will cover those legal steps. That can be achieved by amending regulations that will come forward this month. The point will be met, I hope, on 1 August, assuming that the regulations are approved. It is very important to the Scottish Legal Aid Board and the lawyers that they should be.

Mr. Dewar: Is the Minister saying that, when legal aid is granted, there will be a change by regulation which will allow retrospective cover—which to some extent settles the argument about the effective date of legal aid cover?

Lord James Douglas-Hamilton: That is my understanding.

Amendment agreed to.

Amendments made: No. 27, in page 42, line 5, after `fund)' insert `(a) in paragraph (a)'.

No. 28, in page 42, line 6, at end add—
`(b) in paragraph (c), the words "for the purposes of this Act" are repealed.'.—[Lord James Douglas-Hamilton.]

Lord James Douglas-Hamilton: I beg to move amendment No. 29, in page 42, line 12, leave out 'expenses' and insert 'fees and outlays'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 30 to 33.

Lord James Douglas-Hamilton: The amendments are all of a technical nature and clarify certain aspects of the provisions of section 17 of the 1986 Act in relation to contributions and payments out of property received. In particular, they remove ambiguity as to what is meant by "expenses" and clarify the fact that the board can use sums recovered in civil actions to meet expenditure in related matters handled as advice and assistance. They also ensure that, once an account of expenses is agreed between the Scottish Legal Aid Board and the solicitor, it is not necessary for the solicitor to have the account taxed before he can recover any unpaid contribution from the client.

Amendment agreed to.

Amendments made: No. 30, in page 42, line 21, leave out `the expenses' and insert
'(i) the fees and outlays'.

No. 31, in page 42, line 23, at the end add—
'(ii) recouping any sums paid out of the fund on his behalf in respect of advice and assistance in relation to those proceedings or to any matter to which those proceedings relate.'.

No. 32, in page 42, line 26, lave out `to expenses.'.

No. 33, in page 42, line 31, leave out from 'off' to the end of line 34 and insert—
'(12) An account of expenses which:—

(a) has been agreed between the Board and the solicitor acting for the legally assisted person; or
(b) has been taxed,

shall not be liable to taxation by an auditor of court in any proceedings.'.—[Lord James Douglas-Hamilton.]

Lord James Douglas-Hamilton: I beg to move amendment No. 34, in page 42, line 46, at end add—
'5A. In section 36(2) (regulations), in paragraph (b) at end add:—
and the power to substitute different amounts for the amount specified in section 10(2) of this Act includes power to substitute different amounts in relation to different cases or classes of case".'.
This amendment is necessary to enable a two-tier "prospective cost limit" to be set for advice and assistance,

including assistance by way of representation. This limit is the amount of work which a solicitor may himself authorise without requiring the prior approval of the board. The limit is to be differentiated so that in particular circumstances, and subject to particular conditions, a solicitor may authorise himself to spend up to £150, whereas in normal circumstances he may authorise only £50—or £60 under new regulations proposed to be effective from 1 August. The Act as it stands will not permit this, and the amendment is proposed in order to allow this important additional facility. The facility is an important part of the improvements to the administration of legal aid discussed with the Law Society of Scotland and the Scottish Legal Aid Board.

Mr. Dewar: I feel a little more at home with the subject matter on this occasion. In the dim days of my past I worked in a jobbing solicitor's practice which depended very largely on what were known in the trade as "pink bombers"—the legal aid advice and assistance scheme. This is a very important feature of the legal aid system and one about which I feel strongly because there is no doubt that it allows an enormous amount of help to be given to anxious people with worrying problems which do not necessarily go on any formal legal process. In areas in which there are social problems this is a scheme of prime social importance.
Before we agree to the amendment, perhaps the Minister will say a little about the way in which it will operate, as it is an important change. As the Minister knows, the present limit is self-regulating. In effect, it is administered by the solicitor, who awards himself legal aid. Having exhausted the first £50 of provision, in my day one had to go to the Law Society for authority to increase the expenditure. As I understand the amendment, there is to be a two-tier system in future and in some circumstances the solicitor will be able to spend up to £150. I do not know what those circumstances are, but I have no doubt that they have been hard fought, with the trade trying to make the range of grounds as wide as possible and the Scottish Legal Aid Board, mindful of the Chancellor's hot breath on its shoulder, trying to ensure that the tier is as narrowly constructed as possible. In my day, for example, it was usual to obtain extensions for certain types of consistorial work at the preliminary stage.
The Minister should say a word or two about the circumstances involved because if the amendment produces a wide extension of this area of legal aid expenditure it will have a considerable impact. I welcome the amendment, and I am sure that the profession will welcome it even more warmly, but I think that the Minister should say something about the way in which it will be exercised.

Lord James Douglas-Hamilton: The hon. Member for Glasgow, Garscadden (Mr. Dewar) asked how the system will operate. There needs to be a higher limit where the solicitor expects to have to submit a civil legal aid application. At present, that limit is £50, and regulations which we shall introduce this month will raise it to £60. Above that, a solicitor should be able to incur expenses up to £150 in cases where he expects to submit a civil legal aid application.
The hon. Gentleman wanted to know about the particular circumstances that will apply. They will be set out in the regulations. The purpose of this provision is to


ensure that lawyers should be entitled to take action on behalf of their clients without having to make unnecessary application to the Scottish Legal Aid Board. The key circumstance for availability is that the matter will progress to a civil legal aid application.
The regulations are not quite finalised, but agreement with the Law Society is virtually complete. The Law Society wants to see the final form of words, and that will happen soon. We are anxious that the regulations should progress as quickly as possible. The amendment will allow them to be laid.

Mr. Dewar: I am grateful to the Minister. The fact that the matter has been virtually agreed with the Law Society is a state of grace. I hope that its optimism is justified. I presume—the Minister need only confirm with a nod—that in circumstances where it is not obvious that a full legal aid application will be lodged but additional work may be required for the client, an application for extension can be made at the discretion of the Scottish Legal Aid Board, even though it does not fall within the category that allows a solicitor to award himself the additional room for expenditure.
Presumably, if we have energy and enthusiasm, we shall have a chance to discover what is in the regulations before they come before the House. No doubt, if we wish, we can make representations then. I welcome the amendment in general terms.

Lord James Douglas-Hamilton: I shall check, but to the best of my knowledge the answer is yes.

Amendment agreed to.

Lord James Douglas-Hamilton: I beg to move amendment No. 35, in page 43, line 11, at end insert—

'PART III

Board's property to be rateable

9. In Schedule 1, paragraph 2(4) is repealed.'.

Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 36.

Lord James Douglas-Hamilton: The amendment provides that the Scottish Legal Aid Board will meet its rates bill, instead of the Government making a payment in lieu of rates. The existing provision has resulted in an unnecessarily complex arrangement for the payment of the board's rates. The change will make the provision consistent with that for other major Scottish non-departmental public bodies. There are consequential adjustments to the list of repeals in schedule 6. These are contained in a later amendment. The funding will come out of the same Vote and the Scottish Legal Aid Board will not lose any funds, the funding coming from the Government.

Mr. Dewar: At another time of night and in other circumstances, this would be an opportunity for a splendid debate. This is an almost bizarre amendment. I am not clear as to why a payment in lieu of rates was made in the way described by the Minister. I presume that payment in lieu of rates happened to be exactly the same as the rates bill would have been. That may be a naive assumption, and we need not go into it in great detail. I am delighted that this "non-departmental body"—what a warm glow that gives—is to be treated in exactly the same way as all its kith and kin.

Schedule 5

MINOR AND CONSEQUENTIAL AMENDMENTS

Amendments made: No. 8, in page 44, line 45, leave out paragraph 12.

No. 9, in page 45, line 1, leave out 'that Act' and insert 'the Prosecution of Offences Act 1985'.

No. 10, in page 45, leave out lines 14 to 17 and insert—
'"(4A) Where one party to any proceedings is a legally assisted person then—

(a) for the purposes of sections 16 and 17 of this Act, his costs shall be taken not to include either the expenses incurred on his behalf by the Legal Aid Board or the Lord Chancellor or, if he is liable to make a contribution under section 23 of the Legal Aid Act 1988, any sum paid or payable by way of contribution; and
(b) for the purposes of sections 18 and 19 of this Act, his costs shall be taken to include the expenses incurred on his behalf by the Legal Aid Board or the Lord Chancellor (without any deduction on account of any contribution paid or payable under section 23 of the Legal Aid Act 1988) but, if he is liable to make such a contribution, his costs shall be taken not to include any sum paid or payable by way of contribution.".'.—[Lord James Douglas-Hamilton.]

Schedule 6

REPEALS

Amendments made: No. 11, in page 47, line 48, column 3, at beginning insert 'Section 16(8).'.

No. 36, in page 48, lines 11 to 14, leave out the third column and insert—



`In section 4(2)(c), the words "for the purposes of this Act".



In section 16, subsection (1) and, in subsection (2), the words "in this section and".



In section 17, subsections (3) to (8).



Section 18(1).



In section 32(a), the words ", out of the Fund".



In Schedule 1 paragraph 2(4)".'.—[Lord James Douglas-Hamilton.]

Order for Third Reading read.

Motion made, and Question proposed, That the Bill be now read the Third time.—[The Solicitor-General.]

Mr. Lawrence: As I made clear on Second Reading on 4 May, I support the Bill, for it reflects the Government's determination to stop the trail of open cheques, to impose sensible financial controls, and to take the opportunity to introduce a measure of reasonable improvement in this important aspect of social need. Furthermore, it is clear from the quiet reception that the Bill is now receiving from interested bodies that the vehemence of their initial response was, as we said, a wild reaction to reasonable change and improvements.
Having said that, I must confess to some disappointment. In my speech on Second Reading, at column 896, I drew attention to five issues that were causing concern to the Bar, which has as close a knowledge of and expertise in the working of the legal aid scheme as any other


grouping. It is true that my hon. and learned Friend the Solicitor-General responded immediately and positively to two of those concerns. He put to rest the fears, first, that there would be no appeal against refusals to grant criminal legal aid—there will—and, secondly, that decisions on the granting of criminal legal aid would be taken from the courts, which knew best whether such legal aid should be granted—they will not. The Bar will be grateful for those two assurances.
I am disappointed that the Government have not seen fit to respond as positively as they might have done to three other issues. Those positive responses were also called for by eminent judges such as Lords Ackner and Griffiths in the other place, and by such a non-legal authority as Lord Benson. First, I asked that the principle of fair remuneration for work actually and reasonably done in section 39(3) of the Legal Aid Act 1974—as reasonable a principle of fair pay for a fair day's work as it is possible to devise—be maintained and not swept away. The Government have strangely refused to act, despite the fact that their decision has run contrary to the legal aid White Paper. Certainly there has been an improvement with the list of provisions that are required to be satisfied in an application for legal aid, but there is no reason why the general principle should not remain in the legislation, as well as these detailed requirements which are to be taken into consideration.
When my hon. and learned Friend says that the Lord Chancellor will construe the rules fairly and will be strong against the Treasury, that may well be so of the present incumbent of the Wool Sack, but what guarantee can be given that the next Lord Chancellor, or the one after that, will behave in the same way? I think that the Bar will be puzzled, as I am, by the refusal to leave in the general principle. It would cost the Government nothing. It would not have interfered in any way with those other factors, but the fact that they have taken it out must raise doubts about the future level of remuneration.
Secondly, I asked that parliamentary control be not weakened by substituting the Government convenience of the negative resolution for changes in civil legal aid for the time worn affirmative resolution. The Government have mostly, although not entirely, failed to budge on that one as well.
Thirdly, and most important, I asked that legal aid be extended to certain sectors where it is now not available. At a time when the welfare state activity by a caring and socially conscious Government is expanding, and when the country is becoming economically strong again, there seems to be no justification in continuing to refuse legal aid to poor applicants before social security and employment tribunals. What on earth is the point of giving rights to the individual in the 20th century that he cannot afford to enforce? The Government have not budged on that.
Research is not a substitute for taking action. It is more like a delaying tactic. When my hon. and learned Friend says that the product of the research that we are going into may have a positive response, we have to bear in mind that at least 14 years ago—that is as far back as my memory takes me—we were asking in this place for the extension of legal aid to some of these other tribunals. If we have not had research over 14 years, what is this new research likely to reveal?
I am disappointed, and I know that the Bar will be disappointed. I know that my hon. and learned Friend has tried and done his best, and we appreciate his efforts and his sympathetic approach. It is a cause of sadness to me that, although so much in the Bill is good and warrants support, on those three measures the Government have given the impression of being obdurate and unyielding. Perhaps one day they will see the error of their ways and put these matters right. Until that happy day when I can give the Government three cheers, I give them two.

Mr. Fraser: The Bill re-enacts and consolidates much existing law and to that extent we have no quarrel with it. However, it adds little by way of advance. It edges its way gingerly towards group actions by means of contracts and it makes tiny advances towards tribunal representation. The other changes in the Bill are unwelcome and are much more likely to erode rather than to stimulate the legal aid system. There is a danger—it was reflected in the speech of the hon. and learned Member for Burton (Mr. Lawrence)—that it will stigmatise the legal aid system and provide us with a second-class system with a second-class level of remuneration.
There are other matters about which we are concerned but which we have not mentioned during the Report stage. For example, we are concerned about the removal of conveyancing and will-making from the scope of the green form scheme. We are concerned at that not in general, but where we believe it would cause hardship to some groups, such as single parents who wish to appoint a guardian by way of will. We are also concerned about the imposition of contributions throughout the length of a case, which will be a deterrent to those pursuing justice. It will put a premium on delay and the burden of payments will be related to the weight of the case rather than the extent of the means of the assisted person. The extended payments are likely to be not just a discouragement, but in some cases a penalty upon those who seek legal aid.
We believe that contracting out will remove legal advice—I stress "legal advice"—completely from some people. We believe that the rate of payment for legal aid work will increasingly be dependent not upon value for money or the rate for the job but upon public expenditure considerations. That will involve an abuse of loyalty and commitment of legal aid practitioners. It will be a system of remuneration fixed by the Lord Chancellor without advice from any advisory body, without arbitration if there is a difference of opinion and without appeal. The Bill contains, if it was so used in the hands of another Lord Chancellor, machinery not to axe the legal aid scheme but to starve it to death.
The Bill contains virtually nothing on tribunals apart from what I have mentioned. It contains nothing on law centres. It does nothing to reduce the increasing difficulty of poor people or people of moderate means to obtain legal aid. The Bill has failed to enthuse the professions or the advice agencies, even those that may be the recipients of contracts. It has failed to enthuse the consumer movement and us. In its changes it introduces some mischief, but many opportunities have been missed. Throughout its proceedings in the House it has conspicuously failed to gain the vocal or unequivocal support of Conservative Members apart from incurring the critical appraisal of the Opposition.

The Solicitor-General: The Bill has had a constructive passage through all its stages in the House. We had a series of valuable debates that have helped to illuminate to hon. Members and to a wider public what the Bill is about. We are grateful for the contributions by way of briefing and representation we have received from the profession—the Bar and the Law Society—and from the bodies that comprise the Advice Services Alliance, including the citizens advice bureaux and the law centres.
The Bill sets the framework for legal aid into the next century. It introduces the new Legal Aid Board, which is designed to be responsible for all aspects of legal aid. On the date of the Second Reading in the House the Lord Chancellor announced the membership of the board. Since then, the board has started its work in preparing itself for the assumption of responsibility for legal aid fom the Law Society. I can now announce that the Government intend that that will take place at the beginning of April next year.
The board's objective is a high standard of service for all those who need legal advice, assistance and representation and who would otherwise be unable to obtain it on account of their means and to give that service through a scheme that is efficient and effective and gives value for money. The new scheme will offer the opportunity for improved management of the legal aid system and for an independent and informed reconsideration of priorities. It is an exciting prospect that promises benefits for the assisted person, the legal profession and the public as taxpayers and potential consumers. It is to be welcomed, and I commend it to the House.

Question put and agreed to.

Bill accordingly read the Third time, and passed, with amendments.

Orders of the Day — Combustion Plants (Air Pollution)

The Parliamentary Under-Secretary of State for the Environment (Mr. Colin Moynihan): I beg to move,
That this House takes note of European Community Documents Nos. 11642/83, 5124/85 and the proposals described in the un-numbered Explanatory Memorandum from the Department of the Environment of 9th June 1988 and the Supplementary Explanatory Memorandum of 29th June 1988 on the limitation of emissions of pollutants into the air from large combustion plants; and calls upon the Government to support the agreement reached at the meetings of the Council of Environment Ministers on 16th and 28th June 1988 on proposals for a European Community Directive.
The motion concerns a major piece of proposed European Community legislation on the environment—the the draft directive on the control of emissions from large combustion plants. This mainly concerns power stations, which are responsible for about 70 per cent. of United Kingdom sulphur emissions and 40 per cent. of nitrogen oxides, but also refineries and certain other large industrial plants.
It would be helpful to hon. Members to explain at the outset that the two deposited documents cited in the motion have been overtaken by events, and that my remarks are primarily addressed to the informal version of the directive which the Department submitted under cover of its explanatory memorandum of 9 June. I should mention that there have been a few changes in the proposals since then: notably, the emission reduction targets for individual states—details of which are set out in annexes 1 and 2 to the Department's supplementary explanatory memorandum of 29 June—revised proposals for monitoring and measuring emissions from new plants and special arrangements for Spain.
I am glad to be able to inform the House that agreement in principle has finally been reached on this directive. As hon. Members will no doubt be aware, the directive represents part of the European Community's response to the problem of acid rain and. in particular, the need to reduce emissions of pollutants which contribute to the problem—sulphur dioxide and nitrogen oxides. The other part of the response is the directive on vehicle emissions, which was agreed in December 1987 and, I am happy to say, is now to be supplemented by a further tightening of the controls on small cars agreed by European Environment Ministers last week.
The large combustion plant proposals were first put forward by the Commission in 1983, ostensibly in response to concern over the major forest damage being experienced in central Europe. Large elements of the directive were based on West German domestic legislation, which had been drawn up in response to this problem. I think that there is general acceptance that the problem of forest damage may call for rather more complex remedies than those being put forward five years ago. Equally, there is growing recognition that sulphur dioxide and nitrogen oxide emissions play a large part in forming acid deposition, which contributes to freshwater damage, notably in Scandinavia, but also in some areas of the United Kingdom and elsewhere.
The draft EC directive in its initial form sought to impose tight standards on new plant, and very substantial overall reductions in each country's total large plant emissions by 1995, based on 1980 figures, of 60 per cent


SO2 and 40 per cent. NOx and dust. We and a number of other countries did not consider that the across-the-board approach to emission reductions from existing plant was on a consistent or equitable basis. It suited countries whose emissions had peaked at 1980 levels or those which were investing heavily in nuclear power and would not need to make a major effort to achieve the required emission reductions. However, the formula was a very difficult one for the United Kingdom, bearing in mind that our SO2 emissions had fallen substantially in the decade before 1980 and in view of our heavy reliance on coal-fired power stations. It was also difficult for some of the less well developed states in the Community which are in the process of expanding their capacity to generate electricity.
Negotiations have taken place against a background of growing international concern about acid rain—concern that is fully shared by the Government. Growing evidence that emissions—not only from the United Kingdom but from a number of other countries—were implicated in the acidification of Scandinavian freshwaters prompted the Government to announce significant measures to deal with the problem. In 1984 we announced our aim to reduce emissions of SO2 and NOx by 30 per cent. on 1980 levels by the end of the 1990s.
We have taken significant steps towards achieving those targets. In September 1986 we announced that all new coal-fired power stations would be required to have the technology to control SO2 emissions, and that 6,000 MW of coal-fired generating capacity, the equivalent of three major power stations, would be retrofitted with flue gas desulphurisation equipment. In May 1987 we announced that all 12 major coal-fired stations would have low-NOx burners fitted, and that this technology would be a requirement for new power stations. Those measures will cost over £1 billion.
By any standards, it is a very substantial programme. Very few Community countries—only West Germany, Denmark and the Netherlands—are doing more than we are; most are doing much less. Nevertheless, the original Commission proposals would have required us to do considerably more.
We do not flinch from expensive measures when they are shown to be worth while to protect the environment, nor do we insist on absolute proof before taking remedial action, but we look for reasonable assurances that the action that we decide to take will be cost-effective. Under the original Commission proposals, the United Kingdom would have had to retrofit flue gas desulphurisation equipment to perhaps a further nine power stations at a likely additional cost of more than £2,000 million and within an impracticably short period.
We seriously questioned the extent to which action on that scale would bring worthwhile results ahead of the increasing use of low acid technology, such as fluidised bed combustion, low-NOx burners and coal gas gasification, towards the end of the next decade. Such a programme would bring with it major implications for waste disposal because of the quantities of chemical by-products produced in the scrubbing process—neutralising the acid with an agent such as limestone. The by-products concerned depend on the process used—gypsum, or, where regenerative processes are used to refine the product further, sulphur or sulphuric acid.
Up to a certain level of output, those products are of material value to the building industry or to the chemical industry, but too much and the countryside would be awash with them. Moreover, some of the targets set were just not physically attainable for the United Kingdom, with our high-sulphur indigenous coal, short of a massive switch to the use of imported low-sulphur coal.
The targets for emission reduction from existing plants have been modified under successive presidencies, and the position today is as set out in the annexes to the explanatory memorandum issued by the Department on 29 June. The basic approach is now a three-stage approach to reductions in overall SO2 emissions and two stages for NOx emissions. Different targets are to apply for different member states to reflect their particular circumstances.
The proposals have gone a long way towards recognising the needs and problems of individual member states, while still requiring a substantial overall Communitywide effort to reduce emissions. In the case of the United Kingdom, for example, the SO2 targets that we propose to accept give some credit for the emission reductions achieved before 1980. Those reductions—a 20 per cent. reduction on 1980 levels of large combustion plant emissions by 1993, 40 per cent. by 1998 and 60 per cent. by 2003——

Mr. Allan Roberts: Will the Minister confirm that those are not percentage reductions of the nation's emissions of sulphur but percentage reductions applying only to our large combustion plants?

Mr. Moynihan: Yes, I certainly confirm that. Nevertheless, the hon. Gentleman will be aware that the reductions are very onerous and that even for the large combustion plants they will require a substantial further effort over and above the existing CEGB programme.
The Community has accepted that the United Kingdom's major programme to reduce NOx emissions from coal-fired power stations is fully in line with the spirit of the directive. I am glad to say that the figures proposed—a 15 per cent. reduction in large plant emissions by 1993 and 30 per cent. by 1998, again on a 1980 base—now reflect our programme.
The directive also sets stringent emission standards for new plant. It was during the United Kingdom presidency of the Community, in 1986, and under our initiative, that the negotiations on new plant standards began in earnest. Her Majesty's Inspectorate of Pollution is specifying requirements for SO2 emissions from new coal-fired power stations which are as tough as, if not tougher than, those likely to apply in any normal application in Europe.
However, one particular area of difficulty for the United Kingdom has been that of our indigenous high sulphur fuels. We clearly could not accept any provision that would virtually rule out the use in large combustion plants of the bulk of the coal mined in the United Kingdom. I am pleased to tell the House that our concerns on that score have been recognised. The Community has accepted proposals that would meet the problem while not compromising the high standards for new plant, which the United Kingdom favours no less than our Community partners.
For NOx abatement, the specification proposed by Her Majesty's Inspectorate of Pollution for United Kingdom plant is the tightest that it believes is achievable using "primary measures"—abatement through good design of


the combustion system—which is the technical basis on which the directive is based. I am glad to say that Community agreement has been reached on new plant standards that reflect this. The Community has also reached agreement on a sensible and workable regime for monitoring and measuring those standards.
In return, we have been able to accept that the threshold at which the standards for large plants should begin to apply should he a capacity of 50 MW. Standards for SO2 emissions from coal-fired plant in the range 50 to 100 MW will not, however, be set until 1990 and, when they are set, that will take into account the availability, or otherwise, of low-sulphur coal.

Mr. Nicholas Bennett: As my hon. Friend knows, I have asked several parliamentary questions about this directive as I have a number of oil refineries in my constituency. As a result of his meeting on 4 May with the UK Petroleum Industry Association, can he say whether that association is now satisfied with the part of the directive that relates to existing plants, as opposed to new ones?

Mr. Moynihan: I can give my hon. Friend that assurance. It was obviously important in our discussions with the UK Petroleum Industry Association to ensure that we took proper account of the operating constraints within the industry. I confirm that we have done that. We have especially taken into account the need for flexibility within the refineries as new plant is added. My hon. Friend referred specifically to existing capacity. I hope that I have satisfied his concern about that.
Negotiations on the directive have been long and protracted. Over the last few months we have worked hard with the German presidency and the Commission to remove the remaining obstacles. That work has borne fruit, and agreement was reached on all the outstanding points at issue at the meetings of the Council of Environment Ministers on 16 and 28 June. Subject to the removal of the United Kingdom parliamentary reserve, the way is now open for adoption at an early date. The directive will provide for substantial, but cost-effective, reductions in pollutants from large combustion plants. I will not disguise from the House the fact that the agreement will be costly for the United Kingdom, but it gives the industries concerned firm targets for their future planning. Above all, we can be proud of the major part that we are playing in reducing European emissions and hence in helping to bring about an end to the acid rain problem. The environment of the Community—and, indeed, that of other European countries—stands to benefit significantly from the agreement. I commend the motion to the House.

Mr. Allan Roberts: The Minister has been as skilful today as the Government have been during the past few years when presenting their policies on acid rain. By telescoping all the pollution reduction measures planned until the end of the century, the Government have claimed that their clean-up programme is the second biggest in Europe and that the CEGB is taking substantial steps to deal with the problem. The reality is very different.
We have heard from the Minister some of the old hoary arguments. On the one hand he claims to be taking action on behalf of the Government to deal with the acid rain

problems and the emissions of sulphur and nitrogen, and on the other hand he puts forward the old arguments. For example, he says that it is difficult to identify the real cause of forest damage and that it might not be due to SO2 emissions.
In its first report in the previous Parliament the Environment Select Committee said that this was a complex process involving ozone and photosynthesis and that SO2 was a major contributor to forest damage. Until recently, the Government have denied that sulphur emissions from our large combustion plants have contributed significantly to the problems of acid rain. They did what people used to do when the overwhelming evidence that cigarette smoking caused lung cancer was first presented—they denied that there was any real evidence because it was all statistical or circumstantial.
At one stage, some years ago, we thought that the Government would do something about it, the Prime Minister having been buttonholed by Chancellor Kohl and others, but then there was a meeting at Chequers with the Central Electricity Generating Board and Sir Walter Marshall—the longest, dirtiest weekend in history I think it was called—as a result of which the Government backtracked again.
The Government's present claims rest on two false premises. The first is that the United Kingdom has reduced substantially its sulphur emissions since 1970 and is already on target for making major reductions. If there was a 1970 30 per cent. club, they argue, we would he one of its founder members. The second is that their programme is the most expensive, or one of the most expensive, in Europe for cleaning up power station emissions.
Neither claim is really accurate. United Kingdom sulphur emissions have fallen by more than 40 per cent. since 1970 and nearly one quarter since 1980, but they were caused by external factors such as the increased use of natural gas in the 1970s and 1980s, the increased use of nuclear fuel over the same period and the oil price hikes of 1973 and 1979, when United Kingdom SO2 emissions fell by 500,000 and 700,000 tonnes respectively. The major reason was the collapse of United Kingdom manufacturing industry during 1980 and 1981, when SO2 falls of 400,000 and 250,000 tonnes respectively were recorded. The Government have claimed the credit for those external factors, presenting the pollution reduction as the result of successful policies.
The externality of the solution can be seen in what is happening now. The apparent revival of industry led to art increase of 200,000 tonnes in sulphur emissions last year. Worse is in store. The Electricity Council forecasts annual increases in demand for electricity of 1·6 per cent. for the next five years. Greenpeace-sponsored computer modelling indicates that United Kingdom power station emissions of SO2 will increase by 10 per cent. by 1993, falling to their current level only by 1996.
Neither the Department of Energy nor the Department: of the Environment has been able to disprove that projection, dismissing the rise of 200,000 tonnes in sulphur emissions last year as a hiccup—that is twice Norway's output. The Government's estimates, which appear in. Hansard for 2 November 1987, are 3·4 million to 4·2 million tonnes of SO2 by 1990, and 2·6 million to 3·5 million tonnes by 2000. The upper estimates represent a. decrease from 1980 levels of only 10 per cent. by 1990 and 25 per cent. by 2000.
When compared with other European countries, those figures show an extremely small programme. We have still refused, even though we have signed this protocol, to join the 30 per cent. club, despite earlier indications that the Government might be tempted to do that. The members of the club are pledged to reduce emissions or exports of sulphur by 30 per cent. between 1980 and 1993.
The club includes Austria, which is pledged to a 70 per cent. reduction by 1995, Belgium, which is pledged to a 50 per cent. reduction by 1995, and Canada, which is pledged to the same by 1994. The figures for other countries are as follows: Denmark 50 per cent. by 1995, and Finland, France, Luxembourg, the Netherlands, Norway, Sweden, Switzerland, the Federal Republic of Germany, Bulgaria, the German Democratic Republic, Hungary, Italy, Liechtenstein, the USSR and Ukraine, all 30 per cent. by 1993. Within western Europe the United Kingdom is the largest single emitter of SO2 and we remain so despite what the Government have announced today.

Mr. Nicholas Bennett: When the Labour Government commissioned many of the coal-fired power stations, why did they not include sulphur cleaning equipment as part of the programme? It has been left to the Conservative Government to do that.

Mr. Roberts: It has not been left to the Government. There are 40 major power stations and the Government will retrofit either five or six—the Government are refusing to do it all. If the hon. Gentleman believes that 10 years ago there was the same knowledge and information as there is now about the nature of sulphur emissions and acid rain, he is living in cloud-cuckoo-land. Ten years ago neither the hon. Gentleman nor I had even heard of acid rain. Certainly the environmentalists did not have all the information. They expected the SO2 to be dispersed because of the tall stacks policy, but what goes into the air comes down. Within the past six years evidence has been collected and the forest damage in central Europe and the acid damage to lakes and rivers, which has killed large numbers of fish in Scandinavia, has become evident.
Despite the Government's claim that they are going to do something about it, we will remain, after the Government's programme, the largest single emitter of SO2 in western Europe. In 1990 we will still be contributing 20 per cent. to the EEC's SO2 emissions and will contribute 25 per cent. by 1995. In per capita terms, we are the fourth highest SO2 emitter in western Europe, and we shall be the second highest in 1995.
We are one of only five western European countries that are still refusing to join and sign the 30 per cent. club protocol. We are in league with Spain, Portugal, Greece and Eire. We should all be ashamed of ourselves. The environmental consequences of SO2 emissions are important to us as well as to the forests of central Europe and the lakes and waterways of Scandinavia. The forest damage in Britain is exactly the same in character and scale as that experienced in West Germany when problems were first revealed there. The environmental damage is similar to that suffered by The Netherlands and Switzerland, which consider that parts of their forest areas are a national catastrophe. According to the November Forestry Commission figures, 55 per cent. of all United

Kingdom broadleaf trees and 57 per cent. of conifers had lost more than 10 per cent. of their foliage compared with an ideal tree.
We are facing increasingly serious problems with the acidification of our surface waters. Greenpeace has identified 80 acidified or vulnerable water bodies. Areas vulnerable to water acidification cover more than half of Scotland, nearly half of Northern Ireland, parts of Northumberland, Yorkshire, Cheshire, Cumbria, Sussex, Shropshire, Hampshire, Cornwall, Somerset, Devon, Dyfed, Gwynedd, Mid-Glamorgan and West Glamorgan. The level of pollution falling on those waters is so great that it is stripping them of their buffering capacity. Unless deposition is reduced by 50 to 60 per cent.—not the 30 per cent. required by the 30 per cent. club—those waters will continue to deteriorate. An authoritative independent scientist has said:
Few water bodies in acid, susceptible areas south of Loch Ness, will be immune from acidification.
The Government now herald a new initiative because they have signed the large combustion plants directive. Under the revised directive, the current programme of one 2,000 MW desulphurisation by 1993 will remain the same, and in addition to the two already to be desulphurised by 1998, another two will have to be desulphurised to meet the terms of the large combustion plants directive. That is the CEGB estimate. The Department of the Environment talks about desulphurising three, and the CEGB about desulphurising two. Will the Minister tell us which is correct? The CEGB estimates that the extra cost of meeting the directive will be about £400 million, whereas the Department estimates it at £600 million.
It is difficult for outsiders to work out how many stations will need to be cleaned up to comply with the directive, because we are not allowed access to the assumptions made by the CEGB. The Minister has given us some information today. It would be useful if he could give us more and disclose what proportion of nuclear supply is assumed and how much low-sulphur coal will be imported. It is an important question, not just for acid rain, but for the future of the coal industry. How much of an increase in gas-powered turbines is planned? Without knowledge of those assumptions it is impossible for outsiders to calculate whether the CEGB or the Department is right.
From an environmental point of view, it is important to emphasise that acid rain will not be stopped by the Government's new reduction programme, although that is likely to be the thrust of their propaganda. They are likely to say that they will stop or control it. On Saturday 18 June, in the Daily Express, Lord Caithness said:
Lochs in the eastern highlands of Scotland and English lakes will improve quite quickly.
The newspaper said that people would soon see the results of the clean-up campaign. That is simply not true. The 1986 figures for sulphur emissions were already 20 per cent. below the 1980 figure, so that the consequence of the Government's negotiations is to maintain the status quo until the mid-1990s.
A Greenpeace review of the scientific literature—"Acid Waters"—says that current levels of sulphur deposition are removing the buffering capacity of sensitive lakes across the United Kingdom, and for the next seven to eight years acid lakes will remain acid and sensitive waters will continue to deteriorate. Environmental improvements will take nearly a decade to be seen, and even then will not be


seen everywhere as the proposed reduction programme is not big enough. A Government who care about the environment would not be hailing as a triumph the programme that will clean up five out of 40 power stations over 10 years.
The mechanics of the large combustion plant directive have been left vague. After the EC meeting the Department issued a statement saying:
We intend to leave it to the Electricity Industry to decide precisely how the reductions are to be achieved.
Planning for that will presumably take place over the next three or four years, but the industry is so transfixed by privatisation that its normal thought processes have become frozen. The mechanism by which this is to be achieved must be spelt out. Will the reductions be imposed legislatively? Will they be negotiated between the two new generating bodies? How will reductions be allocated between them? Leaving those decisions to the industry will mean procrastination.
The United Kingdom will not be dismayed by that. At our suggestion, a clause was inserted in the directive saying that any member states that do not achieve their targets may apply to have the figure varied. That is why the negotiations have been long and protracted: at each stage countries like Britain, but mainly Britain, have been trying to water down proposals from other EC countries. In the absence of governmental directive or a concrete system by which the reductions can be achieved, they are likely to fall by the wayside after privatisation.
Larger reductions than are proposed would be technically feasible, although the Government are spreading the myth that they would not. As the Minister said, 80 per cent. of large plants in West Germany will be dealt with. Eighteen will be retrofitted within 10 years, which is four times the size of the CEGB programme in less time. In Britain, three engineering firms—John Brown, Davy McKee and Babcock Wilcox—have said that they could desulphurise a 2,000 MW power station in between 42 and 48 months. Each company could clear up two stations simultaneously. A number of other companies have also shown an interest. The reduction figures arrived at for the United Kingdom are the result of political expediency, not environmental protection.
The reason for the Government's signing of the directive is to study the ground for privatisation. Greenpeace sees privatisation as a useful opportunity for rocking the boat in favour of greater environmental protection and is taking the line that anyone who buys a polluting power station will sooner or later be faced with the bill for cleaning up the mess. I hasten to add that that is the Opposition's view, too. The Government's signing of the phased directive, although a small improvement on the past, will not remove this financial threat from potential investors. The fact that polluting power stations are being sold will be a major difficulty when the Government come to sell off the electricity supply industry.
I was disappointed by the first report on air pollution by the Select Committee on the Environment. That recently published report gave the Government a get-out. I hope that when we hold a debate on that subject we shall be able to discuss it fully with members of the Committee. One of the anxieties felt by members of the Committee was that which the Minister advanced today—that if we go too far with getting rid of acid rain and cleaning up our power stations, there will be a need to import large quantities of low-sulphur coal, which will harm our coal industry. I do

not believe that for one second. There is no need for people in our coal industry to fear clean coal. The best future for coal is clean coal, and desulphurisation will help and encourage the use of more coal-fired, oil-fired and fossil-fuelled power stations.
It suits many people in the electricity supply industry, and the Government, to ignore the problems of acid rain in the hope that others will stigmatise fossil-fuelled power stations as dirty and use that as a justification for more nuclear power. That is a double-dealing way of approaching the matter. Those who are worried about the future of the coal industry would best safeguard that future by campaigning for clean coal, desulphurisation and fluidised bed combustion. Under the Labour party's policy we would have joined the 30 per cent. club long ago and would be well on the way to implementing EEC directives to cut emissions by 60 per cent., not 30 per cent. The Minister admitted that the 20 per cent. reduction by 1993 and the 40 per cent. reduction by 1998 that the directive implies is a reduction in emissions from our major combustion plants, not in our national emissions from all sources of sulphur. That is why the proposals that the Government ask the House to support tonight are inadequate.
Britain's accession to the directive is tardy and inadequate. The current CEGB plans would be wholly inadequate to meet the required targets, even though the Government have agreed to them. Sufficient resources must be allocated to monitoring the new levels and art adequate legislative framework must be established before privatisation.
The secondary environmental effects mentioned by the Minister—fluidised gas desulphurisation, the gypsum problem—must be fully and quickly assessed and reported. The Government should publish their estimates of the scale and cost of desulphurisation before privatisation of the electricity supply industry.
We welcome the minor step forward that the Government have taken by agreeing to the retrofitting of an extra two or three power stations, but five or six out of 40 is not enough. The Government have been back-pedalling and fighting a rearguard action in Europe and elsewhere against conclusive and effective action to deal with sulphur and nitrogen-oxide emissions, and they will still be seen throughout Europe as the dirty young woman of Europe—if that is not to insult the Prime Minister too much. Britain is seen as a dustbin of the world and a major polluter in Europe.

Mr. Matthew Taylor: We have been delayed in having the debate. I regret the Government's decision to pull out of the debate before the EEC debates and decides on the document. It feels as if we are debating it after the horse has bolted, which is a shame. Looking at the Order Papers for 14 June and 1 July, I find it interesting that the first report from the Environment Committee on air pollution has been demoted from relevance. Perhaps the Minister looked at it and decided that it was more to his liking that it should be deemed irrelevant to the debate, which it is not. Even following the decision, as a country or as Europe, we still have not tackled the problems that we face.
Before we look at the agreements of the Council of Environment Ministers on 16 and 28 June, we must


concentrate on exactly what our emission standards should be. Where are we starting from, and where should we go? It is important that we do so because the debate is not about some bleak coal-fired power station or the technicalities of how we go about this; it is about the reality of the gradual pollution of rivers and lakes, the decimation of forests, the erosion of ancient buildings and the poor health of ordinary men and women. It is reported that
more than 3·5 million people in Britain drink water with higher levels of aluminium than allowed under European Community regulations … a Water Authorities Association document recently suggested that metal gets into drinking water as a result of acid rain, and provides further important evidence that Alzheimer's disease may be caused by aluminium in drinking water.
That has caused considerable fear among ordinary people. Reading the reports and letters in local papers in Cornwall, I know that there is considerable concern about the state of affairs in my part of the country, so the debate is about the real impact of acid rain and the Government's record on its prevention.
In November 1987, the Parliamentary Under-Secretary of State for the Environment said that few countries are doing more to reduce such emissions and few are likely to match our performance between 1970 and the turn of the century. Yet the truth is that the United Kingdom has continued and is continuing to oppose the 30 per cent. club. It has been on flimsy ground, because the original justification was that it lacked the necessary scientific, ecological, geophysical and economic substantiation. That has now been dropped. The suggestion that the emission reductions target is purely arbitrary has allowed the Government to duck the debate and not take the necessary action. That has been a drastic consequence. If one reads the experts' reports, one sees that many of them already believe that we have left it too late.
Sadly, two weeks ago, the Select Committee on the Environment was left with the option of repeating its recommendation from 1984 that the United Kindom should join the 30 per cent. club. Had we joined it then, we might not now have to bear the label of the "dirty man of Europe" among our European neighbours. Perhaps we would not now have the Duke of Edinburgh speaking publicly about just how unpopular we are in Europe over our apparent refusal to do anything serious about our air pollution.
Many scientists would now say that the reduction required is about 80 to 90 per cent. of SO2 and 75 per cent. of nitrogen oxide. Environmentalists are already suggesting that the 30 per cent. club is out of date. To my mind, it is better than nothing, and the Government will not even give us that. I hope that during the debate hon. Members on both sides of the House will continue to attempt to persuade the Government that the United Kingdom should at least join the 30 per cent. club.
The Select Committee's report states:
we have concluded that the CEGB programme is still not enough.
The fact remains that the United Kingdom has not even reached the limits proposed by the West Germans of a reduction in SO2 emissions of 70 per cent. by 2003. Instead, we are committed to 60 per cent., which is a small percentage when one considers the overall scientific evidence which suggests that the real target should be in

the region of 80 to 90 per cent. In contrast, the West Germans aim to fit pollution control technology to 36 GW in eight years—six times the United Kingdom programme of fitting 6 GW in 10 years.
What about the British public? Do the Government believe that immediate action on acid rain will be unpopular? Perhaps they feel that there is no backing for what we are asking. It appears that British consumers are more than willing to face their responsibility for the safety of our environment. The Harris research centre found that a phenomenal 89 per cent. of its sample was "very" or "fairly" concerned about the acid rain effects of British pollution and 82 per cent. was equally concerned about its effect abroad. In the same poll 72 per cent. thought that our record on this was "poor" or "very poor", and they are in good international company in believing that. The public are also prepared to pay the price of it. Often it is said that the British public will agree to anything, bad or good, but, when faced with the cost, they take a different view. In a Harris poll last year, 84 per cent. were prepared to accept a 5 to 10 per cent. electricity price increase to clean up Britain's acid rain.

Mr. Allan Roberts: The highest estimate—the CEGB estimate—given to the Environment Select Committee of retrofitting enough power stations to implement the EEC directive was a 10 per cent. increase in electricity charges over 10 years. That is an increase of 1 per cent. a year. The Government have increased electricity prices by 8 per cent. already this year and by next year there will have been a total increase of 15 per cent. to prepare for privatisation. Therefore, cost does not seem to be the real reason why the Government are not taking action.

Mr. Taylor: The hon. Gentleman is right, and he is a little ahead of me. I was about to say that a 5 to 10 per cent. increase is more than we need. If we retrofitted with flue gas desulphurisation units at least a total of 12 power stations, we could halve our sulphur dioxide emissions by 1996 and the cost would be just 40 per cent. of funds generated by already scheduled price increases. That £1,700 million could be added to the £650 million already being spent by the CEGB. It would be a far more useful way of spending those funds that the Government insist the electricity industry raises than fattening the calf for privatisation, as the Government plan. We could not draw a better contrast between the views of the British public and of hon. Members on this side of the House on how public money should be spent and the Government's view that it should be spent on the privatisation of the industry—a limited number of people investing in an industry to make a limited gain.
So far I have painted a relatively bleak picture. There are constructive steps that the Government could take now. Although fitting coal-fired power stations with flue gas desulphurisation units may be part of the answer, we must still deal with the disposal of gypsum produced as a result of that cleaning process. Therefore, the key is to prevent rather than to cure.
Last week an international climate conference in Toronto, called by the Canadian Government, made some constructive recommendations. As reported in The Observer this weekend, one step
would mean cutting back on the burning of fossil fuels. The delegates at Toronto last week called for consumption of fossil fuels to be cut by a fifth over the next 17 years.


That does not mean embarking on a massive nuclear programme, as the Minister suggested during Question Time this afternoon. The recommendation is clear:
The best hope is strict energy conservation. Japan, the world's most successful economy, uses half as much energy per head as the US—and could do even better.
Again, the Government's record shows them to be short-sighted, blinkered or perhaps with their hands clapped firmly over their eyes, looking instead at drastic cuts in the budget of the energy efficiency office from £24 million to £15 million.
Another alternative would be to increase clean forms of energy production. The Parliamentary Under-Secretary of State for Energy recently produced a renewable energy strategy paper entitled "The Way Forward." Unfortunately, it would appear that the safe keeping of our environment through clean forms of energy production will have to be developed by the private sector. Millions of pounds are spent on research and development in nuclear power, but the Government have the clear intention of relying on industry to develop and commercialise research into new forms of renewable energy sources. Again, they are ducking out of their responsibilities. The truth is that only Government investment at adequate levels will ensure that we are world leaders in the production of clean and safe sources of energy.
The agreement that we are considering, on the basis of now out-of-date EC documents, has been held back by the Government. Practical measures have been resisted; opportunities have been forgone. In taking note of the documents, we must also note that the Government are moving forward so slowly that, in terms of pollution, we are actually moving backwards.
I can only say that it is a great shame on Ministers and on the country that we are not taking the lead that we should be taking; that we are not living up to our responsibilities; and that in the process we are letting down not only our European neighbours, but ourselves and future generations.

Mr. Kevin Barron: I view with disappointment this small move in the right direction. We have waited for a long time for action to control emissions from coal-fired plants. I was, however, pleased to hear in both the Minister's speech and a brief intervention from the hon. Member for Pembroke (Mr. Bennett) a recognition that the pollution in the atmosphere is not emitted only by coal-fired plants. It happens in other parts of the country as well, and is caused by oil and gas plants and also by petrol from cars. But, although those causes are acknowledged, there seems to be no headway in joining the 30 per cent. club, or getting anywhere near it. The responsibility always seems to fall on the shoulders of the big coal-fired power stations and industrial boilers—and, indeed, they are responsible for many such emissions.
I welcomed the speech of my hon. Friend the Member for Bootle (Mr. Roberts). We must recognise, however, that the Drax programme, currently before the Secretary of State for Energy and involving one of the biggest coal-burners in the country, envisages commissioning of the first two out of six units—covering 1,330 MW—in late 1993. We are responding very late to the use of technology that has been around for a considerable time.
The memorandum of 29 June, which the Minister put in the Vote Office, showed clearly that the flue gas desulphurisation and low nitrogen burners would meet United Kingdom targets for sulphur dioxide only in 1993, and for nitrogen dioxide only in 1998. On the future, it uses a quaint phrase, stating that it will be for the industries concerned and Her Majesty's inspectorate to determine the 1998 and 2003 sulphur dioxide targets.
I am not sure whether those decisions should be left in those hands. In my view, the memorandum falls far short of any major commitment for targets for this country to meet, even in the current directive. The responsibility is kept away from Government. In that sense, this is not a very positive response to either the directive or the report by the Select Committee on the Environment—although that was criticised by my hon. Friend the Member for Bootle.
The Minister has pointed out that the added expense will require a substantial additional effort over and above the existing programme if these further targets are to be met. If the Government's present plans are implemented, those decisions will be taken by newly privatised generators unless they are taken within the next two years. The competition that the Government wish to see will thus be under attack from the legacy of an indifferent response to the problems for a number of years. I do not put that down just to the present Government, although I think that it is fair to say that they are the first Government who can be accused of sitting on technology which could have been fitted to both new and existing power stations many years before programmes such as that proposed for Drax actually came before the Secretary of State. Previous Governments also dodged the problems of damage caused by emissions, but the present Government have not only known of the damage but have had the necessary technology. They could have done far more in the past eight years before these proposals were brought forward.
We are told that in the new privatised electricity industry competition will come from the introduction of' small generators. There will be big G and little G, but the real competition will be from small generators, although there must be severe pressure on that concept, especially in relation to coal-fired generators, in view of the directives before us. The Government memorandum rightly estimates that it will cost two and a half to three times as much to remove one tonne of sulphur dioxide from a 50 MW plant as from a 500 MW plant, so the introduction of small plants will not be so easy as the Government appear to believe. In that sense, their plans seem somewhat contradictory.
Another way of proceeding is for the Government to ensure that research and development on clean coalburn progresses from its present stage. I trust that the Minister has been briefed on the joint programme, as it currently still is, by the CEGB and British Coal on the pressurisecl fluidised bed combustion project in south Yorkshire. The first stage of that project has made a major contribution to developing the clean coal technology that we have needed for so long, but the next stage is under enormous pressure, and if the funding does not come quickly it is likely that the next stage will not take place. The CEGB has withdrawn its support for the project, apparently on the ground that: it wishes to concentrate its research and development on larger schemes of 900 MW or above. The Minister will be aware also that British Coal is being asked to break even. In those circumstances, the current prospects for the


second phase are not good. That is a great pity as what has been achieved at Grimethorpe in south Yorkshire is an even more efficient version of the pressurised fluidised bed combustion known as the topping cycle, which is a British invention. The work has been totally British, although some foreign money has been invested. The project is under threat.
Is the Minister prepared to ask the Secretary of State for Energy to support the current application by British Coal for further funding of the project? I should like the Secretaries of State for the Environment and for Energy to take action, rather than to utter the words that are so often spoken in these debates. I hope that the Minister will take up the challenge to discuss this matter with the Secretary of State for Energy. The hon. Gentleman nods his head. I remind him of the Government's response to the report of the Select Committee on Environment. Paragraph 3.36 states:
The Government agrees with the Committee that pressurised fluidised bed combustion (pfbc) technology offers excellent prospects for emission control at relatively low costs.
There should be positive Government action to ensure that the second phase at Grimethorpe gets off the ground and the technology is further developed.
The 29 March memorandum referred to the lack of technology already installed and to the sulphur content of coal. It said that Her Majesty's Inspectorate of Pollution and industry were considering implementing a sliding scale for sulphur emissions from power stations—from 30 per cent. for 100 MW to 90 per cent. for 500 MW or more. The matter was under discussion, and I should like to know whether the Minister has anything further to tell us.
The memorandum referred to the possibility of limiting the diversion of high sulphur coal to plant below 100 MW. The Minister mentioned the possibility of imposing restrictions on smaller plants and the associated expenses. Exactly who is considering this possibility? How does this square with comments on attacking emissions from large coal-fired plants?
Has the Department carried out a study into the sulphur content of coal now being produced and of known coal reserves? British Coal publishes regional figures annually. The sulphur content in opencast coal areas can be as high as 2·3 per cent. and as low as 0·7 per cent. in Scottish deep mine coal areas. It is ironic that coal production is decreasing in areas with low sulphur coal. The average sulphur content of British industrial coal is deemed to be twice as high as that in Scottish deep mine coal areas. We should consider exploiting those reserves to the full.

Mr. Jimmy Hood: My hon. Friend has referred to the low sulphur content of Scottish coal. Is he aware that tonight the Prime Minister voted for a Bill that will increase imports of coal from places such as South Africa? Is he aware that Britain imports from South Africa and Colombia coal with a high sulphur content, while there is a threat to close the Scottish deep mine coalfields? Does my hon. Friend agree that that is contradictory?

Mr. Barron: I am grateful for that intervention. My hon. Friend makes a good point about what is likely to happen.

Mr. Nicholas Bennett: He is the intellectual wing of the Labour party.

Mr. Barron: The hon. Gentleman is welcome to take part in the debate to discuss both employment and the damage that can be done by burning coal with a high sulphur content. We are trying to debate the matter in a way that will help Britain and the world environment. Therefore, I hope that he will take part in the debate or at least listen to what is said.
My hon. Friend the Member for Clydesdale (Mr. Hood) is right. It is obvious that high sulphur coal will be cheaper, because it has its disadvantages, especially for countries that are trying to restrict emissions from coal-fired power stations. If there is no restriction on the purchase of cheap coal, the scenario that he paints could occur, and there would be little that any Government could do, even if they knew it were happening, or, in this case, little that they would do. My hon. Friend makes that point well.
While we have deep mine reserves in Scotland of coal with a low sulphur content, I wonder why we are giving up mining it to go in for opencast mining, or even deep mining in other areas where the sulphur content of the coal is higher. If a study has not been carried out into British coal and its sulphur content, we should look at it in some detail to make sure that we are exploiting the right type of coal that could be used at this stage until all coal-fired power stations are fitted, if possible, with filters to prevent the emissions escaping.
It is obvious from what we have heard tonight that the Government's proposals to control emissions from large combustion plants, while they meet some of the future standards in the short term, in the long term are not likely to meet targets. That does not give us much faith that they will be able to do so. Post-privatisation, it will be up to the privatised generating companies, which are likely to be more concerned about short-term profit than about the long-term future of the environment. In those circumstances, I should have liked to have seen something more in these papers, and a better response from the Government than this. I have little faith that the Bill that will be introduced in the next Session to implement privatisation of electricity will contain any regulation that will protect the environment because it will be drawn up by a Government who seem to prefer to leave matters to the market.
I remind the House and the Minister about the major Organisation for Economic Co-operation and Development conference in 1984 on the environment and the economy. It concluded:
Continued environmental improvement and sustained economic growth are essential, compatible and inter-related policy objectives … The environment and the economy, if properly managed, are mutually reinforcing and are supportive of and supported by technological innovation.
That is something that we seem to have forgotten since 1984, because we have not come forward in great haste to solve the problems that we have as a nation been creating with atmospheric pollution for many years.
Coal, which has been an energy source in this country for generations, if not centuries, and will be for many generations and centuries in the future, is essential. The only way we can ensure its future is by taking more positive action against the pollution that we have been putting into the skies for many generations. I hope that, if the Minister cannot refer at great length to this now, he


will discuss it in great detail with the Secretary of State for the Environment so that Government action in the EEC can be more positive than it has been.

Mr. Moynihan: I will try to assist hon. Members by answering as many of the points as possible. There were one or two technical aspects on coal and specific energy questions raised by the hon. Member for Rother Valley (Mr. Barron) that I shall take up with my right hon. Friend the Secretary of State for Energy. I am sure that the hon. Gentleman will forgive me if my expertise on that aspect is not as competent as his. He can rest assured that I will come back to him on the specific points regarding energy that are not within my remit. The hon. Gentleman will be the first to accept that my main concern has been to ensure that emission reductions are achieved. However, there are a number of points on which I can assist the hon. Gentleman.
I accept the hon. Gentleman's point about clean coal and the joint programme with the CEGB and British Coal in south Yorkshire. I recognise the hon. Gentleman's strength of feeling on that matter. I shall be raising the issue with my right hon. Friend the Secretary of State for Energy, because I feel that there are important environmental consequences in that programme which need to be taken further in discussions. The hon. Gentleman was right to underline a point made in an intervention by his hon Friend the Member for Bootle (Mr. Roberts) with regard to the directive not encompassing NOx and SO2 emissions. We need to ensure that we do not look at the debate in isolation from the important work that must continue, not least with regard to vehicle emissions. During the negotiations the other night I was involved for four or five hours on the small car directive. It was important to reach a decision.
I should say to the hon. Member for Truro (Mr. Taylor) that I regret the fact that an earlier debate was not possible. He will recall that the House was weary, after many hours of debate, but it would have assisted me in preparing for my negotiations at the European Council because the issue was alluded to during the negotiations as a result of the work done by my noble Friend Lord Caithness.
On the point about who will decide the necessary reductions and how they will be acheived, it will be for the industries, such as the electricity industry, and the pollution inspectorate to determine appropriate means of meeting the targets. The important thing is that we have undertaken the commitment to emission reductions and we must look to the precise administrative arrangements. There are no plans to change the current general arrangements whereby operators are under a statutory obligation to use the best practical means for preventing emissions to air of noxious or offensive substances and for rendering harmless or inoffensive such substances as may be emitted.
Some detailed legislative changes may result from the directive. However, I envisage that that will occur primarily not within the proposed privatisation legislation, but in air pollution legislation. We will have to look in detail at the changes that may be required.

Mr. Allan Roberts: rose——

Mr. Moynihan: We believe that some detailed legislative changes may be important, but, as the hon. Member for Bootle knows, we are involved in a current review of air pollution legislation and I will take on hoard whatever intervention he wishes to make.

Mr. Roberts: I have heard rumours on the subject. Is it correct that it will be announced in the Queen's Speech that in the next Session of Parliament there will be legislation to update pollution control and to deal with environmental issues?

Mr. Moynihan: I made it clear to the House that we are currently reviewing the air pollution legislation. The time at which that comes before the House is yet to be decided. The important point is that the review is under way. The implications of the directive with regard to some detailed changes make that review more important in legislative terms. I am sorry that I cannot assist the hon. Gentleman with the precise timing. No doubt he would not expect me to do so.
The hon. Member for Truro raised the issue of aluminium and Alzheimer's disease. There have been recent claims linking aluminium in water supplies with Alzheimer's disease. It is important to recognise the effect that acid rain, by acidifying surface waters, has on aluminium levels in drinking water. I cannot comment on the medical aspects of the problem. However, a further comprehensive report is coming later in the year, which I have already announced to the House. It will require detailed consideration. Fears about this matter can be allayed because Alzheimer's disease is believed to be related to other factors. Over 90 per cent. of one's daily intake of aluminium comes from foodstuffs, not water. That is not to minimise the importance of the debate or the need for full and comprehensive medical assessment, but to put it into an important perspective.

Mr. Matthew Taylor: I am sure that hon. Members will welcome the fact that the Minister will be making a further report to the House about this matter. Will that cover the different levels of the problem throughout the country? Clearly the problem concerns people in specific counties.

Mr. Moynihan: We are considering that matter in detail, not least because of its implications for different water authorities and their treatment processes. This is not a matter for over-reaction. It needs careful consideration in the light of the further evidence. There are no medical grounds for concern. It is accepted that the genetic element plays a large part in Alzheimer's disease. Some people are more likely to develop it than others.

Mr. Allan Roberts: Surely the Minister accepts that aluminium in water is not good for people and that it would be wise to reduce it?

Mr. Moynihan: The Government would not actively support an intake of aluminium well in excess of that used in water treatment. The Government's medical advisers have made it clear that there is no perceived medical risk as a result of the use of aluminium in water supplies. As to senile dementia, one must bear in mind that well over 90 per cent. of one's aluminium intake comes from foodstuffs. All these points are being borne in mind in the further consideration of the substantive report. The problem will be carefully considered in detail and we shall report to the House in the usual manner.

Mr. Hood: Given that 90 per cent. of our aluminium intake comes from foodstuffs, should we not be doing everything we can to reduce our aluminium intake, whether it be in food or water? The Government cannot say that 90 per cent. of our intake is from food so they will ignore water. We should be doing all that we can to reduce all intakes of aluminium because we know that it is harmful to health.

Mr. Moynihan: There is no medical danger in the consumption of a small amount of aluminium or any of the other minerals used in water treatment. The degree and amount of consumption are important factors. The link between aluminium in water and Alzheimer's disease, which was first suggested by the Norwegians, was such that research was increased. We are considering the results of that research and will report back to the House.
The central point of the debate has been the 30 per cent. club. I agree that the 30 per cent. club is out of date. A club should be set up on an arbitrarily chosen date because the base date makes a significant difference. The 30 per cent. club requires a pledge to reduce national SO2 emissions by 1993 to 30 per cent. below the 1980 level. United Kingdom sulphur emissions fell by 1·5 million tonnes, or 24 per cent., between 1970 and 1980. In 1987 we were about 40 per cent. below the 1970 level and 20 per cent. below the 1980 level. To illustrate how differently other countries are placed within the European Community, including the United Kingdom, sulphur emissions rose by 1·5 million tonnes between 1970 and 1980. Our partners' emissions rose by twice the amount that ours fell. Large plant emissions fell substantially between 1970 and 1980, although not as much as total emissions. The important consideration is that there is a joint commitment to reductions throughout Europe.
I was asked how many retrofits were involved. For the first time we have a commitment based on a binding percentage reduction rather than a specific capital programme. It will be for the industries concerned, in conjunction with Her Majesty's Inspectorate of Pollution, to determine the best means of meeting the targets. It would not be possible to estimate precisely the number of retrofits for a programme extended into the next century, but it represents about double our present efforts. As has rightly been said, the CEGB estimates that there could possibly be as many as three extra retrofits.
Privatisation would not affect the United Kingdom's ability—indeed, its need—to meet its commitments. Successor generator companies will remain under the statutory obligation to use the best practical means for preventing emissions, as do current private sector operators of large combustion plants such as oil companies.
The environment of Britain, the Community and Europe in general stands to benefit substantially from agreement on the directive, and I commend it to the House.

Question put and agreed to.

Resolved,
That this House takes note of European Community Documents Nos. 11642/83, 5124/85 and the proposals described in the un-numbered Explanatory Memorandum from the Department of the Environment of 9th June 1988 and the Supplementary Explanation Memorandum of 29th June 1988 on the limitation of emissions of pollutants into the air from large combustion plants; and calls upon the Government to support the agreement reached at the meetings of the Council of Environment Ministers on 16th and 28th June 1988 on proposals for a European Community Directive.

Orders of the Day — Richmond Yard (Valuation Contract)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]

2 am

Mr. D. N. Campbell-Savours: The Richmond Yard and Cluttons contract affair goes to the very heart of the integrity of Government. It is a story of deceit and departmental and ministerial embarrassment. It has all the characteristics of a Le Carré novel—villainy, conspiracy, deception, bluff, obfuscation and the ludicrous.
It started with a memo from Mr. G. Hopkinson, director of the London region of the Property Services Agency, dated 29 April 1987 to Sir Gordon Manzie and to the Minister's private secretary. In this memo, a copy of which I have, the Minister is reported to have said:
The Prime Minister and the Secretary of State have specifically asked that Richmond Yard be valued now by a private sector valuer.
The memo goes on to say, "Please get it done." It was done. A £40,000 plus VAT contract was given to Cluttons to value Richmond Yard, the new DHSS headquarters in the heart of Whitehall. No tenders were invited for that contract.
We now know that no sooner had the contract been let than all hell broke loose in the Department. Civil servants, incensed by what they saw as the pouring of taxpayers' money down the drain, ran amok, leaking like sieves. My bucket was out collecting wherever possible as usual.
Enter my hon. Friend the Member for Warrington, North (Mr. Hoyle), who tabled a key question on 14 March this year—a whole year later. He asked:
what estimate the Property Services Agency has made of the cost of undertaking the valuation of the Crown premises at Richmond Yard by in-house staff".
The Minister panics, because by this time an in-house assessment has been made and it shows that the job of valuation could be done for £1,500 plus VAT. The Minister is clearly on the hook. Does he tell the truth to Parliament? His civil servants submit replies. All tell the truth; all are rejected. The Minister breaks out in a cold sweat and 14 days later, having rejected all replies, the Minister pens his own reply:
No in-house assessment was made."—[Official Report, 14 March 1988; Vol. 129, c. 461.]
The die was cast as a lie was told. That lie will cost the Minister his job.
However, the truth refuses to lie down.

Mr. Michael Fallon: On a point of order, Mr. Deputy Speaker. Is it in order for the hon. Gentleman to allege that a lie was told?

Mr. Deputy Speaker (Sir Paul Dean): I did not understand the hon. Member for Workington (Mr. Campbell-Savours) to accuse the Minister of telling a lie. If he did, he must, of course, withdraw.

Mr. Campbell-Savours: I unreservedly withdraw.
The truth refuses to lie down. Civil servants, by the coachload, are haemorrhaging information. They want not only retribution, but a head.
I then went to the National Audit Office to secure an inquiry. John Bourne, the Comptroller and Auditor General, ordered one. Its findings revealed that the

PSA subsequently considered that their own costs would have been about £1,500 in an estimate made after the commercial firm had completed their work.
The Minister was back on the rack. He responded with his next lie. In his letter of 26 May to my hon. Friend the Member for Warrington, North he said:
In the context of my reply I felt that the assessment to which I referred was the valuation for rental purposes and not the cost of undertaking that valuation. It was certainly not my intention to mislead you"—
that is my hon. Friend—
or the House on this point".
He then claimed that "ambiguity" was the cause of the misunderstanding. What garbage. Who does the Minister think he is fooling? He spent 14 days drafting the reply that he now claims was unintentionally ambiguous. He knew precisely what the question meant. He knew that the crucial words were "of the cost of".
Smelling not a rat but a skunk, I further corresponded with Mr. Speaker in an attempt to make an application for contempt against the Minister on the basis that he had deliberately misled Parliament. Mr. Speaker accepted the Minister's explanation. I suppose, in retrospect, that I could not expect Mr. Speaker to pronounce the Minister a liar. However, I should point out that Mr. Speaker was not given access to the draft replies that the Minister had rejected. I feel sure that the Minister was relieved, but his relief must have been short lived, because I subsequently found out that he was canvassing his colleagues in the corridors of the House for support.
Events then took a new turn, following a letter from me to the Prime Minister. My letter was clear and concise. I asked, first, whether the Prime Minister would endorse the Minister's explanation. Secondly, had she really ordered that the original valuation should go out to the private sector in the way that the Minister had told his civil servants? This morning I received the Prime Minister's reply. She said:
I fully accept his explanation.
She would, wouldn't she? To reject the explanation of a Minister would be to call him a liar.
The right hon. Lady did not reply to my second question. I am now informed that an inquiry into the Hopkinson memo is still continuing in Downing street. As I stand here tonight, the writing is on the wall. No. 10 is embarrassed; the Minister's private office is in turmoil; he is locked in an argument with Sir Gordon Manzie on the use of consultancies by the PSA; throughout the PSA he is treated with deserved contempt and ridicule; people in his private office snigger when he walks through the door; and, to cap it all, he actually ordered a leak inquiry to find out where the wally from Workington was getting his leaks from.
I shall let the Minister into a little secret in the Chamber tonight, which I feel sure is as safe between these four walls as was the story of his antics relating to Richmond Yard within his Department. I shall say it quietly for fear that it will leak out and cause congestion on all main line stations in the London area. An InterCity express train could not accommodate all the leakers. Everyone knows the truth; everyone cares; everyone is laughing at the Minister; everyone wants him to resign; everyone wants the truth out, most of all his hon. Friends, who have repeatedly said it to me privately over the past few weeks. Just tell us the truth.

Mr. Doug Holye: rose——

Mr. Deputy Speaker: Order. Does the hon. Gentleman have the agreement of the hon. Member for Workington (Mr. Campbell-Savours) to speak?

Mr. Hoyle: Yes.

Mr. Deputy Speaker: And of the Minister?

Mr. Hoyle: Forget about him.

Mr. Deputy Speaker: Order. It is my job to preserve the Adjournment debate, and I shall not call another hon. Member to speak unless he has the agreement of the hon. Gentleman whose debate it is and of the Minister. I call Mr. Chope.

The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): If the hon. Member for Warrington, North (Mr. Hoyle) wishes to speak, I do not object, but he has not canvassed the possibility with me before.

Mr. Hoyle: I shall not take very long, but I wish to speak about this despicable event because it was to my question that the Minister was forced to reply. He has been dragged to the House tonight.
On 14 March, I tabled the key question, asking
what estimate the Property Services Agency has made of the cost of undertaking the valuation of the Crown premises at Richmond Yard by in-house staff".
The Minister replied:
No in-house assessment was made."—[Official Report, 14 March 1988; Vol 129, c. 461.]
In his letter of 26 May, the Minister said that he was referring to the actual valuation rather than to the estimate. There can be only two explanations for the Minister's behaviour. The first is that he did not understand the question, in which case he is clearly incompetent to be a Minister. The second is that he was misleading the House. In either case, he should resign. We shall probably hear a resignation speech from him tonight.
That was not the end of it, however, as I gave him a further opportunity to clarify the matter when, on 25 March, I asked
if he will ask for an estimate of the cost of the Property Services Agency providing a valuation of the Crown premises at Richmond Yard; and if he will make a statement.
The Minister replied
No. It would serve no useful purpose."—[Official Report. 25 March 1988; Vol. 130, c.237.]
Again, there are two explanations for his answer. Either he was saying that a statement would serve no useful purpose, which circumstances have shown to be incorrect; or he was saying that there was no useful purpose in estimating the cost of valuation, which is very odd given that he knew that a valuation had already been made by his Department.
It has been reported that the Minister told the London director of the PSA, Mr. Giles Hopkinson, that no less a person than the Prime Minister had asked for a valuation by a private firm. Will the Minister tell us whether that is true?
Either the Minister is incompetent, because he is unable to understand a question, or he has deliberately been misleading the House.

Mr. Deputy Speaker: Order. The hon. Gentleman, who is an experienced parliamentarian, knows that it is not in order to accuse any hon. Member of deliberately misleading the House. He must withdraw that remark.

Mr. Hoyle: I unreservedly withdraw that comment, but there are precedents for what has happened. Because of incompetence over the Crichel Down affair, a Minister resigned on 20 July 1954. There is also the precedent of John Profumo. I hope that the Minister will get up and announce his resignation.

Mr. John Butterfill: On a point of order, Mr. Deputy Speaker. The hon. Member for Warrington, North (Mr. Hoyle) is implying that my hon. Friend the Minister has misbehaved and has attempted to mislead the House. Surely that must be out of order.

Mr. Deputy Speaker: I ruled that the hon. Gentleman should withdraw that remark, and he did so.

The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): Even by the standards of the hon. Member for Workington (Mr. Campbell-Savours), he has gone over the top in the hysterical way in which he has approached the debate. Both the hon. Gentleman and the hon. Member for Warrington, North (Mr. Hoyle) put their case on the basis of selective quotations, especially from my reply on 14 March to not one but three questions from the hon. Member for Warrington, North. Their case is based on the argument that part of my reply purported to be a specific answer to one of those questions. It is a sad day when hon. Gentlemen are not prepared to accept the explanation that is given. I make no apology for introducing less passion, but more reason, in my reply.
When the Government are considering the use and allocation of Government accommodation, it is important that we consider the way in which we can bring home to Departments the cost implications of their decisions. Such matters lie at the heart of our decision to seek a private sector valuation of Richmond Yard, and I shall use this opportunity to explain why our decision in this case cannot sensibly be discussed or understood except in the wider context of our policies on the location of Government Departments and, more generally, on contracting out.

Mr. Campbell-Savours: The cost of the valuation was 25 times the price of the in-house survey.

Mr. Chope: So why did we decide to use the private sector in the case of Richmond Yard? To understand our decision I have to begin by explaining how Departments are charged for the buildings they occupy. We expect Departments to pay the opportunity cost of the accommodation they occupy. In other words, they pay the full market rent. Minds have to be concentrated and Departments have to be made to take hard decisions on whether they need to stay in central London or should move to cheaper accommodation elsewhere. Even Opposition Members will recognise the benefits of the price mechanism for encouraging Departments to look seriously at the possibility of relocating away from London to cheaper accommodation. It is only one factor among several, but the cost of accommodation has a key


role to play in Departments' consideration of whether to move Civil Service jobs to the less prosperous regions of the country.
With the right professional expertise it is not too difficult, in most parts of London, to assess what a market rent should be.

Mr. Campbell-Savours: We already know all that.

Mr. Deputy Speaker: Order. It is impossible to hear what the Minister is saying because of constant sedentary interruptions. This is a serious debate. The Minister has had some harsh things said about him and he is entitled to reply and to he heard in silence.

Mr. Chope: Thank you, Mr. Deputy Speaker.
The PSA estate surveyors are as good as any of their counterparts in the private sector at analysing comparable rents for similar properties in a particular area and determining an accurate figure. The PSA estate surveyors do an excellent job and I am grateful to them, but we face a particular problem in Whitehall, where the Government themselves are effectively the only market makers. Whitehall is not a particularly popular area commercially, in part because there are so few buildings that are not in Government use, yet it is the one area, above all others, in which Departments would wish, if possible, to have their central headquarters.

Mr. Butterfill: Does my hon. Friend agree that many public companies and public bodies, such as the Church Commissioners, employ firms such as Cluttons? Cluttons is regularly employed by the Church Commissioners to carry out valuations, despite the fact that they have their own in-house surveyors capable of doing the job. If the Church Commissioners find it desirable to confirm the figures that have been given by its internal surveyors, is there any reason for the Government to behave differently? Should they not seek to emulate the Church Commissioners?

Mr. Chope: My hon. Friend speaks with great knowledge and experience of these matters, and he is absolutely right. Many firms with in-house staff choose, for particular purposes, to employ outside valuers and estate surveyors.
As I said, the problem with Whitehall is that so few buildings are not in Government use, yet it is the one area above all in which Departments would wish to have their central headquarters. We considered the possibility of introducing a premium additional to market rents to reflect the benefit to Departments of a Whitehall location, but we concluded that such an artificial arrangement would not necessarily reflect the most cost-effective use of Government buildings in the area. We have settled instead for arrangements that allow Departments to argue their case for accommodation in Whitehall on operational grounds, while at the same time ensuring that they are fully conscious of the true economic costs of their decisions.
The latter point is crucial, but in the circumstances of the Whitehall market the true commercial rent is especially difficult to establish. The problems were compounded, in the case of Richmond Yard, by the fact that it was the first new freehold building to have been designed and built in Whitehall since the war. In that sense, the building was unique and there were no other properties with which it could be compared directly. Therefore, we needed a valuation that would carry conviction in the unusual,

indeed unique, circumstances of this case. There was no absolute answer without putting the building on the open market, and any assessment short of that is a matter for informed professional judgment.

Mr. Campbell-Savours: How does the Minister justify paying to Cluttons 25 times the amount that he would have paid if the job had been done in-house by his officials? That is what everyone wants to know.

Mr. Chope: That is a difficult point, but it is worthy of answer and I am coming on to answer it.
In view of the importance of the case and the fact that we were dealing with a major new development costing more than £40 million, we needed an independent assessment that would stand up to criticism as to its validity, both on the methodology to be used and the figure arrived at on the basis of that methodology. My professional advisers in the PSA decided that Cluttons should be used to carry out the valuation. Cluttons has considerable experience of public interest matters. It is familiar with the type of buildings that the Government own and occupy and the constraints that can apply in the open market.
With that in mind, the PSA initially consulted one of Cluttons' senior partners informally on the general issue of valuations in the Whitehall area. That was done on a personal basis, and his advice was given on the same basis and without charge. That preliminary informal advice showed that Cluttons fully understood the issues, and officials decided not to approach other firms when it came to a formal contract specifically for a valuation of Richmond Yard, but to negotiate terms.
Initially, Cluttons proposed a fee of 1·5 per cent. The figure was negotiated down to I per cent., and that was accepted by my professional advisers as being reasonable in terms of fees generally prevailing in the market place. It represented no more than the going rate for the job. They did not regard 1 per cent. of one year's rent as excessive in relation to the total rent at issue. It is smaller still in relation to total accommodation charges in Whitehall, for which the valuation now provides a useful bench mark.

Mr. Butterfill: Does my hon. Friend agree that a 1 per cent. valuation fee is common in the market, especially in areas where there is some uncertainty about the valuation? There is then a high risk that the valuers could be sued on their valuation, and the cost of insuring against that risk is extraordinarily high.

Mr. Chope: My hon. Friend has great knowledge of these matters. In this case, the PSA was able to negotiate a one third reduction of the fee that was originally quoted by Cluttons.
The hon. Member for Workington has laboured the point that the cost of using Cluttons was substantially higher than the cost of undertaking the work in-house. I have explained why we decided, on policy grounds, to use the private sector. The additional cost is justified on those grounds alone, but I should also comment on the comparison that has been made between Cluttons' fee of £35,000 plus VAT and the estimated in-house cost of £1,500 plus VAT.
The simple fact is that the two figures are incapable of direct comparison. The profession operates on a fee basis, and always has done. In practice the consultant makes money on a few large cases, but losses on many others,


with no charge at all for the considerable proportion of work that goes into cases that subsequently do not proceed. The client pays no more than the value of the advice, irrespective of the cost to the adviser. The standard RICS scale fee for valuations, before these scales were abolished, was 2 per cent. The fee covers all the running costs and overheads of enabling the firm to take on one-off commissions with no regard to the possibility of further work from that source. It also covers the costs of insuring against professional negligence and includes a profit element. The PSA in-house figure is based on hourly charges for staff time. It includes overheads, but, because all the staff concerned are employed on a permanent basis, makes no allowance for risk or for the peaks and troughs in work load for which any firm in the private sector has to budget.
Nevertheless, I well understand the desirability of achieving true comparisons between in-house and private sector costs, and when we have commercial accounts in PSA, with a bottom line figure, it will be far easier to make those comparisons. We are now well on the way to achieving that objective following my right hon. Friend the Secretary of State's announcement on 25 May that the PSA should become a fully commercial organisation equipped to compete in the open market.
My right hon. Friend said that from 1 April this year a new relationship had been established between Government Departments and the PSA on major civil projects. Civil departments now have financial responsibility for their own requirements and can choose between using the PSA and outside agents. From 1 April 1990 that arrangement will be extended to all civil and defence services. At that time the PSA will be reorganised into three businesses. Two of them will be service businesses providing project and estate services.

Mr. Hoyle: rose——

Mr. Chope: I shall not give way again. I have only about five minutes and I want to answer the points made by the hon. Member for Workington.
The third business, ownership of civil property, will involve the PSA in continuing to manage the common user element of the civil estate, but a substantial amount of property will become the responsibility of individual Departments.
The principle of these reforms is that the PSA is no longer to be the sole provider and maintainer of all Government accommodation. It will offer a service to Departments, but the Departments as clients will have financial responsibility, and there will be a move to a position in which the PSA is in competition with outside suppliers of design——

Mr. Hoyle: Will the Minister give way?

Mr. Chope: No, I shall not.

Mr. Hoyle: The hon. Gentleman is frightened to give way.

Mr. Chope: I must rise to that. The hon. Gentleman was able to participate in the debate without having spoken to me beforehand, and I readily agreed that he could do that. Now he is ungracious enough to suggest that I am frightened of him.
Our policy on the use of consultants is quite clear. We use them whenever we can demonstrate that they provide value for money. We use them if staff shortages, particularly in London at the present time, mean that we have no alternative. We use them if by so doing we enable in-house resources to be redeployed more cost-effectively to other work, thus improving our overall quality of service. Finally, we use them if they possess a particular expertise not available within the PSA. The agency is not staffed to cope with every foreseeable or conceivable demand on resources, nor has it ever been.
If the hon. Member for Workington is in any doubt about the present position, I can tell him that there are 31 estate surveyors and 14 graduate trainees and students in post in the London region of the PSA, and there are about 11 vacancies.

Mr. Campbell-Savours: Will the hon. Gentleman give way?

Mr. Chope: No.
Finally, let me make it absolutely clear that there was never any intention on my part to mislead the House, as hon. Members have suggested. The decision in principle to use a private sector valuer to value Richmond Yard was taken by Ministers. I stand by that decision and I believe that it was right in the circumstances. My only regret is that Opposition Members apparently failed to understand my replies in answer to questions from the hon. Member for Warrington, North in March. They were intended to make clear, first, that no in-house assessment of the rental valuation had been undertaken and, secondly, that an assessment of the cost of undertaking the valuation in-house would serve no useful purpose, as far as I was concerned. The answers were simply a statement of fact.
The hon. Gentleman is persistent and repetitious in his accusations, but that does not make him right. He has sought throughout to put an interpretation on my answers that is wrong. Rather than accept the correct interpretation, he persists in an endeavour to make party political points. The House will see those for what they are and no doubt put them alongside other obsessions for which the hon. Gentleman is so renowned.

Question put and agreed to.

Adjourned accordingly at twenty-nine minutes past Two o'clock.